Samara–Western Direction Oil Product Pipeline: What’s Wrong with the Management of a Seized Asset?

The Institute of Legislative Ideas systematically monitors the activities of the Asset Recovery and Management Agency (ARMA). We pay special attention to how the agency fulfills its function of managing seized assets. Our analysis covers the types of assets transferred to ARMA’s management, typical issues at different stages of the process, and broader systemic factors that hinder effective asset governance. We focus on practical aspects of asset management, particularly when it comes to the potential for future disposal. Based on our monitoring, we develop recommendations for improving procedures and regulatory frameworks.

The Institute’s experts analyzed the case of the Ukrainian section of the Samara–Western Direction oil product pipeline, which was previously de facto controlled by entities linked to Viktor Medvedchuk. In 2021, following a decision by the National Security and Defense Council (NSDC), the asset was seized and transferred to ARMA for management. The public competition was won by Ukrtransnafta PJSC, which established a dedicated department for managing the pipeline.

Despite the state’s victory in all court instances, ownership rights have still not been officially registered — a process that has been delayed for over a year. At the same time, there are ongoing risks of former owner influence due to the involvement of employees from Prykarpatzakhidtrans, the previous operator, in the asset’s management. This practice may lead to conflicts of interest and reduced management efficiency.

Moreover, the transfer of the asset to ARMA occurred without a proper valuation of its worth, and there is limited public information about the economic performance of the asset under current management. According to official data, more than UAH 10 million has been transferred to the state budget, though this does not include operating expenses and taxes.

📎 Read the full analytical brief