Czechs Looking For Crude Oil Options

December 2012, Vol. 239 No. 12

The Czech Republic may secure a strategic stake in the TAL oil pipeline which would be an opportunity to book priority capacity in the pipeline that is its major alternative to the rapidly drying Russian Druzhba.

With Russian crude supplies dropping hugely as producers seek new routes and higher prices, the Czechs have become more dependent on TAL, which carries oil from Azerbaijan, Kazakhstan and Iran via Trieste to Germany. TAL will account for 87% of oil shipments to the Czech Republic with Druzhba shipping no more than 13% – a huge drop compared with the long-term trend of 80% of demand arriving from Russia. 

Such limited options are risky as pipe operator Mero has sought a stake in TAL for years. Mero – said to be in recent talks with Shell over a stake – now appears to have upped its efforts in the wake of a recent halt of supplies due to limited capacity in the system.

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