Romania charges Lukoil in $1.9bn fraud

An exterior view of Lukoil's refinery is seen near the city of Ploiesti, in southern Romania. © Bogdan Cristel
Romanian prosecutors have charged units of Russian oil producer Lukoil for alleged money laundering in a €1.77 billion (US$1.94 billion) criminal probe. Last month they seized company assets worth up to €2 billion as part of a year-long investigation.

Formal charges were brought against several executives of Lukoil’s Petrotel refinery in Romania, including director-general and two deputy managers, according to a court statement issued Monday evening. No trial date has been set.

"Throughout 2011-2014, the indicted... have used the company's assets in bad faith and the credit it enjoys, for a purpose contrary to its interests, to favor other companies in which they had a direct or indirect interest to strike crude oil purchasing contracts," the statement said.

Prosecutors said the Romanian secret service, SRI, had helped them in the investigation.

READ MORE: Lukoil doesn’t plan to withdraw from Romania, appeals asset seizure

After the €2 billion asset seizure last month, Lukoil appealed to the European Commission to help fight money laundering and tax evasion charges at its Romanian refinery. At the time, Romania said the seizure was part of an ongoing investigation, but Lukoil denied the accusations, calling them "totally unfounded" and bad for business.

Russia’s second-largest oil producer appealed in a Romanian court against the asset seizure and announced it is not planning to leave Romania or change the management of the refinery.

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The investigation against the Lukoil Petrotel refinery started in 2014 and allegedly resulted in €230 million in damages. Romanian authorities then halted production, froze the assets of Petrotel, confiscated raw materials, crude oil, and other products. Lukoil’s refinery later resumed its activities after authorities lifted a freeze on the assets and activity.

The Petrotel refinery is one of the largest oil refineries in Romania which processes 2.4 million tons of crude per year.