AMIC station network started operating in Ukraine in 2015, following the sale of stations and oil terminals from Russian Lukoil to the Austrian company, AMIC Energy. Prior to the full-scale war, the company imported fuel from Lithuania, Belarus, and the now non-operational Kremenchuk Oil Refinery.

Audrius Stropus, the CEO of AMIC Ukraine, told Delo.ua about how company operated during the first year of the war, as well as about all losses, plans for 2023, and fuel price predictions.

How much did you lose because of the war?

After Russia’s invasion of Ukraine, 36 of our stations and one of the largest oil terminals in Borodyanka were either damaged or destroyed entirely. As of today, 13 of them were restored and resumed operation.

It is hard to estimate the exact amount of damage as of now, since we do not have quotes for restoring damaged objects. However, preliminary estimates show that the losses will be at €20 million the lowest. That doesn’t include stations located on the temporarily occupied territories. We used to have nice stations on the left bank of the Kherson region, there are still good stations in Melitopil too. When these territories return under Ukrainian control, we will be able to assess the damage more properly.

Recently, you filed a lawsuit to the European Court of Human Rights (ECHR) against Russia. What do you think are the chances that Kremlin would cover the expenses for damages they caused?

We filed a lawsuit against Russia with the ECHR on January 14, 2023. According to our lawyers, this is a win case.

To be more specific, on January 25, 2023, in Strasbourg, the ECHR moved on with an important procedural decision regarding the case Ukraine and the Netherlands v. Russia on the events in eastern Ukraine and flight MH17. The ECHR recognized that Russia was in control of the separatist-occupied Donbas since 2014, and therefore is responsible for the violations that occurred there during the occupation. Therefore, it is expected that this approach would be re-applied to other temporarily occupied territories.

We are convinced that in the 21st century, violence and hostile acts against an independent country can not be committed with impunity, and we believe that Russia will be held accountable for all its crimes against Ukrainians.

Even before the full-scale war, you supplied a lot of fuel from the EU, in particular, Orlen production. But you also bought fuel from Kremenchuk Refinery and Mozyr Refinery. Were there a lot of non-European resources? How did supply logistics change because of the war?

We supplied 30% of the fuel from the Lithuanian Orlen oil refinery, we have long-standing relations with them, and they are very disciplined in fulfilling their obligations. We also had connections with the Belarusian Mozyr Oil Refinery. This is the closest refinery to Kyiv and the logistics of deliveries to our oil terminal in Borodyanka were very close and efficient. We also started working with the Kremenchuk Refinery in 2019, as their quality, especially in recent years, improved greatly. We supplied the south of Ukraine with fuel from Kremenchuk, the east - from the Mozyr Refinery, and fuel from Orlen plant went to gas stations in the western and sometimes central regions.

Orlen has increased supplies, but due to the closure of the short rail link from Lithuania to Ukraine, fuel is delivered by road through Poland. In April, we plan to start supplying fuel from the oil refinery of the Austrian company OMV.

You said you had an oil terminal in Borodyanka. What happened to it?

When the invasion began, the terminal in Borodyanka was filled up completely. We understood that the Russians might get it and informed the respective authorities in the Government about the resource. We wanted to prevent the enemy from getting this fuel.

Did you call fire on yourself?

Yes, we actually did call fire on ourselves when we saw on the video surveillance cameras that Russian troops come into the premises.

And how much fuel was there?

There was about €10 million worth of fuel at the terminal. After the strike, four tanks, drip structures, pumps, and other equipment burned down to ashes. The Russians thought that the base was destroyed to the ground, however after the territory was deoccupied on April 4, we discovered that five tanks and railway tanks with diesel fuel were safe. As a result, we estimate our losses at about €4 million worth of fuel.

When the war started, how did the head office in Vienna react?

On February 16, 2022, one of the company's shareholders and Managing Director Günter Maier came to Ukraine. We discussed the situation. He met with employees and expressed his support, despite all the fears and statements of world leaders that were already made back then with all embassies evacuating urgently from Kyiv. Günter Maier clearly assured the staff that no matter what happens in Ukraine, AMIC Energy will fully support both: the employees and Ukraine in the fight for its territorial integrity.

Also, the Managing Director said that the most valuable resource are the people who work here. And the safety of employees should prevail over the preservation of the company's assets.

Have you relocated your employees from life-threatening areas? Did you help the Armed Forces of Ukraine and internally displaced?

On February 24-25 of 2022, many employees promptly decided to evacuate. Everyone chose a safe place for themselves. Some left Ukraine. AMIC Energy employees in Poland, Lithuania, and Latvia took an active part in finding accommodation in the EU for our staff. There were areas where almost all employees had evacuated to safer places, making it impossible to operate stations. Therefore, office staff and regional managers, who decided to stay, literally worked at stations and performed the functions of every staff member: they dispensed fuel to emergency services and military units and served customers too. It was during the fuel crisis due to supplying problems while certain gas stations remained empty.

Since the first days of the war, AMIC Energy has supported not only the Armed Forces of Ukraine but also other state entities. The company has been continuously helping Ukraine with personal protection equipment, vehicles and regular supplies of essentials. Today, 77 of our employees are deployed to the Armed Forces of Ukraine and we continue to pay them wages. We also support the 242nd Separate Battalion of the Territorial Defense of the Armed Forces of Ukraine, where our employee is a deputy commander. We also help sappers. In total, since the beginning of the invasion, our charitable expenses have accumulated over ₴57 million, from financial support of the staff, to the purchase of anti-drone weapons.

Your company is suspected of tax evasion and withdrawal of dividends in favor of Russians. What is the company's position on these ESBU allegations?

The attempt to justify the seizure of property with "tax violations" looks particularly absurd given the data retrieved from the State Tax Service of Ukraine, according to which our company is in the TOP-5 largest taxpayers per 1 liter of fuel sold in 2020, just like it is in the TOP-5 largest taxpayers of the Ukrainian fuel market according to the results of 9 months of 2021.

We are the only company in the fuel market where assets and operations are under one legal entity. We do not transfer money to subsidiaries. All the money we earned over the years are in Ukraine.

No less bizarre is the ESBU accusation involving Russian beneficiaries of AMIC Ukraine. And the accusations of having ties with citizens of the aggressor country are supported by an abstract from the 5-year-old prepaid article published in 2017 on Antikor – a resource that was repeatedly caught on publishing paid fake news about businessmen and their relatives, politicians, and others.

I think that the case began amidst of the trend of "background check for everyone", and since AMIC bought assets from Lukoil, then, unfortunately, we might also be highly suspicious. To make the case look appealing, it was labeled with financial transfers and tax evasion.

More interestingly, according to our own source of information, ESBU dropped the charges withdrawal of dividends to the Russians. Because not a single transfer was found. It is easy to check in bank statements. This accusation may sound even more bizarre considering that the final beneficiaries of AMIC ENERGY are three citizens of Austria and one Irish citizen.

While under arrest, your stations continue to operate. How did the arrest reflect on your business in general?

The arrest does not allow us to resell stations. We have no intention of doing so though. When the arrest was imposed, we asked to drop it, but the court refused. We are allowed to work. This arrest is a part of a lawsuit, but the case is not moving at all. We ask the case to be considered. This is the main thing. Everyone is talking about us, but no one is doing anything. The case is not really being considered at this moment and it hurts business. That's why we strive for justice.

Although there are companies that made profit last year, AMIC Energy's revenue decreased by a quarter. What caused your losses?

Firstly, let's consider that Ukraine is currently at war right now. Many people fled. At the moment, part of Ukraine remains under temporarily occupied.

Decrease in sales explains a lot. In addition, our logistics costs became way more expensive. As a result, some companies prioritized southern supply, such as Romania and Bulgaria. Some - Poland, while we have a traditional bond with Lithuanian Orlen. Another big share we had was refueling civilian aircraft. This part of the business was significant for us. We refueled aircraft for only two months in 2022, and then the airspace for civil aviation was closed. We did not try to achieve any targets last year; we did not have an objective to make profit. The main goal was to survive, keep the team, create new supply chains, and find new fuel suppliers.

Since the New Year, prices on the market are constantly decreasing. We’ve been observing it for three months by now. A lot of people are waiting for the sowing season to start with farmers participating on the market way more actively. Do you think would it make the market more consistent? Will prices start to rise?

Prices are decreasing mainly because traders have started to reduce their premium. There is a lot of fuel available in Poland, Romania and Bulgaria, and while the traders' premium used to be $250 per ton, now it is at $130 per ton, which is the price we pay to the supplier. Before, we used to chase sellers and ask for fuel, but now it's the other way around. This is the market. I think that the sowing season would not have any affect on the market generally, nor will consumer demand, as the traffic has become less intense.

What are your plans for the next year? What trends do you observe on the fuel market this year?

We have several scenarios. Today, we see that we need to improve our logistics, move to a lower importers' premium, have more rail deliveries, and thereby reduce production costs. We are currently transporting fuel by road from Lithuania, which is expensive. We also plan to restore all damaged assets and retain our staff. The market, of course, has become much smaller than it used to be before the war. As for the strategic plans for this year, it is important for the company, as well as for Ukraine as a whole, to recover quickly. We are planning to rebuild the reservoir park at the Borodyanka oil terminal and continue to restore other destroyed facilities.

How much do you plan to invest in the business this year?

We plan to invest about €4-5 million in the reconstruction. We want to fix the damaged tanks at our oil terminal.

What is the situation around station related products? Are you working in this direction too?

Of course! Come to our stations, we have the most delicious coffee. In addition, for every hot beverage sold as part of the Invincible Coffee charity campaign, we donate 2 hryvnias to the restoration of Ukraine.

In the EU, trade in related goods is more developed than in Ukraine. We still have a lot of work to do to reach the same level as there. But we are developing this business direction ourselves. In Finland, for example, the Neste company sells gasoline only, and the entire non-fuel part of its stations was sold to competitors long ago. It is interesting that after the invasion, the fuel market in Ukraine fell dramatically, but sales of related products did not decline as much. When there were problems with electricity, 86% of our stations had generators and people came to us for hot food. Currently, all 199 operating stations are equipped with generators.

You have 25 years of experience working for energy companies in Lithuania, Finland, and Poland, which are the EU members. What is the difference between fuel retail in Ukraine and same business in the EU?

In Europe, you first fill up your tank and then pay for it. This is not the case in Ukraine, and it probably won't be for a while. There are no station attendants in Europe, people fill up their cars themselves. By the way, we were the first to give up on the station attendants. In addition, Ukraine’s bureaucracy is a big deal, there are requirements for some outdated standards. A penalty for an improper signing in a day log, may cost you the price of the station. There are a lot of details like this, when the rules were adopted back in 1998, before all this digitalization, and they continue to prevail. And many authorities make a use of it. But these norms were outdated long ago – they should be canceled or reviewed. The level of digitalization in Ukraine is the same as in Europe, but inspectors still demand the old-fashioned way.

Does it mean that Ukraine is able to operate under the EU regulations?

Of course. In Europe, the rules are more liberating. Ukraine, when faced with the fuel crisis in the spring of 2022, began to integrate into the EU fuel market rapidly.

But there is still much to change. For example, every station in Ukraine is perceived as an explosive. I am obliged to have a fire extinguisher in my office for some reason. But in the EU, everything is way simpler. The EU countries also have their own outdated norms, however they are working on updating them. Yet I can easily see Ukraine joining the European Union and adopting the most advanced and progressive norms.