With the escalation of climate change, global attention is increasingly focusing on the need to accelerate the transition to clean energy in order to reduce the related risks. However, in the EU’s energy imports today crude oil with a 69% prevails, followed by natural gas with 16%.
At the same time, as we know, the main supplier of energy resources to the EU is Russia, which provides about 40% of gas for Europe. Norway and Algeria account for a significant share of total EU gas imports. Norwegian fields in the North Sea are connected by underwater highways with several European countries, including Germany, Great Britain, France and Belgium. In turn, the Trans-Mediterranean and Medgaz gas pipelines connect Algeria with Italy and Spain, respectively.
Despite the constant “oil swings”, a similar situation is developing with oil imports: the first place with 26% still belongs to Russia. As the oil price falls, the price of oil products remains more stable, that is why Russia is seeking to process domestically and export more volumes of oil products than crude oil.
In this regard, the Samara – Western Direction oil product pipeline attracts particular attention. This main product pipeline was built in Soviet times to supply diesel fuel from the Russian Federation through the territory of Belarus to Hungary. The design capacity of the pipeline is 3.5 million tons per year. Still it is not the oil product pipeline itself that is of interest, but the scheme employing which the Russian and Hungarian parties, through the intermediary of a number of companies, make a profit bypassing European legislation.
As we know, the cost of European oil products significantly exceeds the cost of Russian ones. Hungary managed to take advantage of this, using its status of a state re-exporting oil products. Thus, receiving energy resources from Russia, Hungary transported them on the same day, in particular, to Ukraine, which is confirmed by the customs databases.
The Hungarian MOL Group has been involved and still takes a direct part in this, including its like-named subsidiaries, which regularly export petroleum products (fuel), lubricants, additives and distillation products to the territory of Ukraine. At the same time, the cost of oil products immediately increases, and Ukraine receives Russian energy resources under the pretence and at the price of European.
The main enterprises of the MOL Group in Hungary that export their products to Ukraine are the MOL Hungarian Oil and Gas Public Limited Company, MOL LUB KFT and MOL Nyrt. At the same time, from the part of Ukraine, control over this section of the pipeline was obtained with the knowledge and participation of the Russian and Hungarian parties by people from the entourage of Viktor Medvedchuk, the disgraced Ukrainian oligarch, who came under sanctions for organization of propaganda activities in Ukraine, as well as for his support of pro-Russian militants in Donbas. Now these accusations have been complemented with aiding the terrorists by supplies of oil materials to the territories of occupied Donetsk and Luhansk regions.
As a result, the story, which began with the search for economic benefits by the Hungarian elite and political advantages by Russia, develops into aiding terrorists and an international scandal.
In addition, the volume of energy resources received by the Hungarian party from Russia was registered in the documents regardless of the share exported to Ukraine. As a result, the proceeds from the transit were successfully deposited in the pockets of the organizers of the scheme from Hungary with the tacit knowledge and agreement of the Russian party. Thus, Russia tied the political and business elite of Hungary “for a coin”, buying itself the loyalty of Europe.
It is worth noting that the aforementioned MOL Group in the period from 2011 to 2015 was already involved in an intermediary scheme that enriched the elite close to Prime Minister Viktor Orban’s Fidesz party. At the time, MVMP, a subsidiary of the Hungarian state-owned MVM electricity company, imported gas from the Switzerland based trader MET International, ostensibly to replenish Hungary’s reserves.
MET International was reportedly partially owned by MOL, with the Hungarian government as its largest shareholder together with several Hungarians (one of whom is allegedly close to Orban) and Russian citizen Ilya Trubnikov.
MET bought Russian gas cheaply on the spot market, sold it to MVMP, and then re-bought gas on the Hungarian party of the border with a small surcharge for transportation by the Hungarian-Austrian gas pipeline. The ministry decree authorized MET monopoly access to the pipeline. The MET gas price was significantly lower than the rate set in Gazprom’s long-term fixed contract for the supply to Hungary, but the company could sell gas domestically at market prices.
This arrangement has benefited MET owners at the expense of the Hungarian state budget. In addition, this scheme was based on the informal consent of the Kremlin, since Gazprom controls the gas resale in Europe.
As we can see, today the beneficiaries are all the same persons who continue to implement corruption schemes through other companies.
For Europe, in addition to the problem of ensuring the reliability and security of supplies, reducing import dependence on Russia, diversifying transit routes, there is another problem – the problem of uncovering corruption schemes and violation of European legislation on combating corruption and fraud, which have not only economic, but also far-reaching geopolitical consequences.