BELARUS NEWS AND ANALYSIS

DATE:

11/01/2007

Russia, Belarus move closer to deal in oil row

MOSCOW, Jan. 10 (Xinhua) -- Belarus on Wednesday canceled a customs duty it imposed on Russian oil exports amid a dispute over oil transit between Moscow and Minsk, raising hopes the deadlock that has led to the disruption of oil flows to Europe could be resolved soon.

Moscow has tied the withdrawal of the transit duty, which was imposed after Russia slapped export duties on crude oil supplied to Belarus at the beginning of the year, to the start of any talks.

In Minsk, Belarussian Prime Minister Sergei Sidorsky announced the decision to scrap the duty after a government meeting and said he would go to Moscow on Thursday to meet with his Russian counterpart Mikhail Fradkov, news agencies reported.

"We hope we will resolve other issues as well within two days -issues concerning oil supplies to Belarus and transit of oil to Europe," he was quoted as saying.

Shortly afterward, talks led by Russian Economic Development and Trade Minister German Gref and Belarussian Deputy Prime Minister Andrei Kobyakov resumed in Moscow.

The head of Russian state pipeline operator Transneft, Semyon Vainshtok, said the company was ready to resume operations to pump oil to the Druzhba pipeline, which was shut off Monday morning, news agency Interfax reported.

Russia provides about a quarter of the oil and gas consumed in the European Union (EU), some of which is piped through Belarus. The oil disruption has affected Poland, Germany, Hungary, the Czech Republic and Slovakia and raised concerns in the EU although it said the stoppage posed "no immediate risk" to energy supplies in the bloc.

German Chancellor Angela Merkel on Tuesday called the shutting off of the Druzhba pipeline "unacceptable" and urged diversity of energy supplies in Europe.

"It is unacceptable when there are no consultations over such actions. This destroys trust again and again," Merkel said.

Germany, the largest economy in Europe, imports around 100 million tons of crude oil a year and about 20 million tons are supplied via the Druzhba pipeline.

The move to annul the transit duty followed an announcement by Belarus that a compromise to the row was found during a telephone conversation between Belarussian and Russian Presidents Alexander Lukashenko and Vladimir Putin earlier in the day.

Lukashenko and Putin "came to a compromise, which would help settle all the problems including those connected with Russian oil transit to European states via Belarus," after talking on the telephone, state news agency BelTA reported, citing the presidential press service.

The Kremlin issued a terse statement on the two leaders' telephone talks but did not mention a compromise.

The two presidents discussed "economic cooperation between Russia and Belarus, including in the energy sphere, such as problems related to the transit of Russian crude oil via Belarus," the statement said.

The oil row came on the heels of a dispute over natural gas supplies between the two countries. After tense negotiations that dragged on until New Year's Eve, Belarus agreed to pay more than double the previous price for Russian gas supplies this year.

Source:

http://news.xinhuanet.com/english/2007-01/11/content_5590320.htm