Ukrainian networks of filling stations have managed to master the European market of motor fuel after losing Russian and Belarusian fuel with the beginning of full-scale invasion of Russia thanks to the offer of competitive prices and fast contracts, Vasyl Danilyak, СЕО of OKKO group, said.
“Ukrainian companies did not enter their supply market, where everything was contracted a long time ago. Accordingly, they could outbid on price and fast contracts. Despite the unacceptable price, we started contracting 100 percent of possible resources in all corners of Europe,” he said at the Kiev International Economic Forum on Thursday.
At the same time, Danylyak noted that such decisions were made, among other things, emotionally, although they were not always economically justified.
He explained that the European chain of deliveries is much longer than the ones from the East and North directions, when “pipe deliveries were 3-4 days, by rail from the nearest Belarusian refineries to the average tank farm, the fuel took seven days at most.
“And in Europe the chain could stretch for two months or more. For example, we bought in the region of Amsterdam-Antwerp a fairly expensive resource. Supply logistics are complicated: first by small (because of the low level of the Rhine) barges to Germany, then it pours into big terminals, and then you wait for shipping windows because there are queues. So, in the middle of April we made an advance payment, and the last shipment arrived, if I’m not mistaken, in October,” Danilyak described the situation.
He noted, however, that even if the company had known in advance how difficult the delivery would be, it would still likely have made the contract.
“There was such a shortage that the decision was obvious. The fact that it would not be very profitable was not thought of then,” the CEO of “OKKO” assured.
He also stressed that changing the logistics of petroleum products as the war began was the biggest challenge not only for OKKO, but for the entire industry.
“It was the biggest challenge in the first month of the war that companies focused on. The whole market was confronted with the fact that on one day all deliveries were zeroed out, everyone fixed their losses at the time of February 24, who had prepayments, to whom the goods had not arrived in large quantities. Accordingly, everyone began to refocus on Western supplies. And in about three months, in June, the consumers felt a significant improvement, and in July everything was as if nothing had happened,” said Danilyak.
In addition, he expressed the opinion that dispersed business has more flexibility in crisis situations.
“Big and in one place is not always a good thing, although perhaps more cost-effective. Our business, where there are a lot of small businesses, has proven to be more resilient to stress than, for example, the steel industry, when the loss of two key businesses took out seventy percent of the business,” he argued his opinion.
In this connection Danilyak marked that “OKKO” would adhere to the policy of diversification in future too, that, in principle, the essence of the company business allows.
He also paid attention that war experience will teach many companies to follow fire safety rules strictly in accordance with all the requirements that “earlier they looked through the fingers” to some extent.
After the acquisition of Kherson Oil Transshipment Complex in early 2021, OKKO Group invested more than UAH 60 million in the reconstruction of the facility, according to a press release from the company on Tuesday.
“During this period, the company has modernized a tank farm and an oil depot, which is part of Kherson Oil Transshipment Complex, built new auto-loading points, restored a fire reservoir, etc.,” the document says.
According to OKKO Group, on the territory of the oil depot, located 4.5 km from a harbor, a new auto-loading rack with an automated control system has been built, which can serve six vehicles at the same time, as well as a new pumping station.
Since a railway track is connected to the tank farm, a railway overpass for loading into tank cars also operates on its territory.
“We received an object in which no one had invested anything for years. Thus, we faced a difficult task: to make it not only economically efficient, but also technologically safe in the shortest possible time,” Vasyl Kindiy, Head of OKKO oil terminals network, said.
According to him, the company intends to carry out significant volumes of work at Kherson Oil Transshipment Complex also in 2022. In particular, an increase in the traffic flow is expected, including due to the arrangement of infrastructure for receiving bitumen tankers.
At present, Kherson Oil Transshipment Complex is capable of receiving simultaneously two tankers with a volume of 6,500 tonnes each with a period of unloading one tanker about a day.
“But already now we can say that Ukraine has got another opportunity to fill the domestic market of petroleum products with resources from the Black Sea and Mediterranean regions,” Kindiy summed up.
The OKKO Group network has 10 own oil depots, one gas pumping station, Kherson Oil Transshipment Complex, 19 stationary and mobile laboratories for quality control of petroleum products.
The group includes a network of OKKO filling stations (Concern Galnaftogaz) – one of the largest filling networks in Ukraine, which includes 420 filling complexes.
The majority shareholder of the company is Vitaliy Antonov, among the minority shareholders is the European Bank for Reconstruction and Development.
The OKKO network in 2021 invested more than UAH 25 million in arranging solar panels at its filling stations, the company’s press service said.
According to its data, thanks to this they were installed at 50 more filling stations of the company, in total there are already 63 such complexes. In particular, in Lviv region – 15, in total in Kyiv region and the capital – 15, in Odesa and Zakarpattia regions – 5 in each.
In 2022, OKKO plans to continue equipping its filling stations with solar panels.
The total design solar capacities of OKKO are currently about 1.4 MW. The volumes of electricity that they are able to generate per year make it possible to save more than 1,000 tonnes of standard fuel from non-renewable sources.
The press service clarifies that the generated electricity is used to cover the filling stations’ own needs in energy resources. In summer months, their capacity is sufficient for a medium-sized filling complex to be able to fully provide itself with its own electricity.
“Our company will continue to actively develop this area. We consider it not only in the context of economic benefits, but also from the point of view of developing alternative sources of energy supply, preserving exhaustible resources, both within the company and in the country as a whole,” Vice President of OKKO for Development and Technical Support Oleksandr Hehedysh said.
OKKO (Galnaftogaz Concern) has opened a new filling complex in Kharkiv, which became the 26th in the region and the 415th in the network.
According to the group’s press release, the new filling station has six fuel dispensers with five types of fuel, including the brands Pulls 95, Pulls Diesel, and a gas module. At the filling station there is also a shop, a cafe, and a heat showcase with ready-made meals.
Since the beginning of 2021, this is the fifth opening of a new filling station in the network: in January, June and July, OKKO opened four modern complexes in Bila Tserkva, Dnipro, Odesa and Lviv.
The OKKO filling station network is part of OKKO Group and is one of the largest filling networks in Ukraine, which numbers 415 filling complexes.
The structure of the company also includes the largest network of on-road catering establishments operating under the brands Hot café, A la minute, Pasta Mia and Meiwei. The company’s divisions are engaged in the sale of goods through stores at filling stations, the sale of petroleum products in large and small wholesale, provide services for the examination of fuel quality, storage and transportation of petroleum products.
The OKKO network has ten own oil depots, a gas pumping station, Kherson oil transshipment complex, 19 stationary and mobile laboratories for quality control of oil products.
The majority shareholder of the company is Vitaliy Antonov, among the minority shareholders is the European Bank for Reconstruction and Development.
