Deutsche Bank Cuts Ties with Russian Operator of CPC

Deutsche Bank AG has ceased all operations with the Russian legal entity of the Caspian Pipeline Consortium (CPC), CPC-R JSC, QazMonitor reports.

The CPC is a Russian-Kazakh venture that connects the Tengiz oil field in the Caspian Sea with the Novorossiysk-2 marine terminal on the Black Sea. It is operated by two legal entities – CPC-R (Russia) and CPC-K (Kazakhstan).

The 1,511 km pipeline serves as Kazakhstan's main export route, accounting for more than 80% of Kazakhstan's oil exports. In 2022, it has transported and shipped 58.7 million tons of oil.

The Consortium faced numerous difficulties cooperating with foreign partners, even though it is not subject to any international sanctions against Russia. According to CPC-R, the London branch of Deutsche Bank refused to cooperate with the company on the placed dollar assets back in October 2022.

CPC-R had to request help from the Kazakh authorities to solve problems related to the supply of equipment from the EU, the United States, and Great Britain.

Now, the Russian legal entity is forced to diversify its portfolio risks associated with sanctions. In order to ensure the timely fulfillment of obligations to suppliers and contractors, it has opened accounts in three Russian banks – Raiffeisenbank, Gazprombank, and Rosbank.

Since March 2022, the company has also transferred 100% of its insurance coverage to the Russian insurance market with the participation of Russian National Reinsurance Company JSC. Prior to that, 99% of its coverage was placed on international markets.

Currently, the following legal entities are shareholders of the CPC:

– Russian Federation (managed by Transneft JSC) – 31%

– Kazakhstan (managed by KazMunayGas with control over 19% share and Kazakhstan Pipeline Ventures LLC with 1.75%) – 20.75%

– Chevron Caspian Pipeline Consortium Company – 15%

– LUKOIL International GmbH – 12.5%

– Mobil Caspian Pipeline Company – 7.5%

– Rosneft-Shell Caspian Ventures Limited – 7.5%

– BG Overseas Holding Limited – 2%

– Eni International N.A. N.V. – 2%

– Oryx Caspian Pipeline LLC – 1.75%