Outbreak of War in Ukraine – Effects on Preem
Imports of crude oil to Sweden from Russia may be affected by the recent outbreak of war between Russia and Ukraine.
Preem condemns the war in Ukraine. We see strong support and commitment among our employees, and everyone's thoughts are with the suffering civilian population.
Preem is following the developments in Ukraine closely, and has since the time of the outbreak of war decided to pause all new trade in suppliers and raw materials from Russia. Since the decision was made, no new agreements have been signed.
Preem has no agreements with Russian crude oil or gas suppliers. We already have agreements with suppliers that partly use Russian raw materials in their deliveries. Preem works hard to avoid deliveries of Russian raw materials, and is stepping up its dialogue with the relevant suppliers to avoid Russian raw materials, which we have succeeded on most occasions. The suppliers in question have agreements with third parties that make it more difficult to withdraw from agreed contracts at short notice.
With 80 percent of the Swedish domestic production capacity, we have a social responsibility to ensure the national fuel supply. We closely follow the discussions on possible sanctions, and may be forced to re-evaluate individual decisions regarding suppliers and raw materials due to technical production or contingency reasons.
In recent years, Preem has reduced its purchases of crude oil from Russia by about three quarters, from 41 percent (2019) to 11 percent (2021). We have decided that Preem will become a climate-neutral company, with net zero emissions along the entire value chain by 2035. To achieve this goal, we will increase the production of biofuels, and phase out fossil crude oil in favor of renewable alternatives.
Updated 10.20, April 5 2022
Currently, Sweden and Preem have low exposure to Russia. Imports of Russian crude oil make up only 7 per cent of Preem’s total crude oil purchases. Preem see no indication of the situation having any major effect on Swedish fuel supply. The vast majority of crude oil purchases to Sweden originates from other regions and fields, such as the North Sea, which accounts for about 70 percent of the total import volumes.
The crude oil and fuel market is very uncertain. Preem is following developments closely and has paused all incoming orders of Russian crude oil pending sanctions.
Currently, Preem is expecting a number of raw material deliveries from Russia to the Lysekil refinery. As of now, a delivery of crude oil is currently in port at the refinery (25/02/2022). In addition, a delivery of vacuum gas oil is expected to arrive on Saturday (26/02/2022). All agreements regarding deliveries from Russia were entered into before the invasion (24/2/2022).
Updated 16.25, February 25 2022