URALS QUALITY PROBLEMS

REUTERS - Russia's pipeline monopoly Transneft is investigating a case of contaminated oil, Russian President Vladimir Putin said on Saturday, adding that this could lead to a wider inquiry, possibly including law enforcement agencies.

Poland, Germany, Ukraine and some other countries suspended imports of Russian oil via the Druzhba pipeline this week due to the contamination. Russia said it plans to restore the pipeline to Europe to stability in two weeks.

"I am aware of what happened, but the details are unknown to me because in order to understand what happened there one needs to conduct an investigation," Putin told reporters in Beijing, adding that he briefly exchanged views on the case with Belarusian President Alexander Lukashenko.

The problem arose last week when an unidentified Russian producer contaminated oil with high levels of organic chloride, which is typically used to boost oil output but which must be separated before shipment as it can destroy refining equipment.

Russian Prime Minister Dmitry Medvedev ordered the energy and trade ministries to conduct an inquiry within seven days and prepare proposals on how to avoid a repeat, Interfax news agency reported, citing a government statement which said the results should be sent to the prosecutor's office.

Transneft said on Friday that the contamination which led to the suspension of the oil flows to Europe could be deliberate, and that a criminal case was opened, Interfax news agency said.

"First of all, of course, it is necessary to conduct an investigation at the level of Transneft itself, and to identify the place from which it came from, for what reasons, what it was and so on. This investigation is ongoing," Putin said.

"If the internal corporate investigation is not enough, I do not rule out that we will conduct more thorough (investigation) with the help of law enforcement agencies and specialists."

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