BELARUS NEWS AND ANALYSIS

DATE:

13/01/2007

Russian official says country's reputation damaged by oil dispute with Belarus

The Associated Press

MOSCOW: Russia's trade minister acknowledged Saturday that his country's reputation suffered in the oil duty dispute with Belarus that disrupted supplies to Europe, and said Russia must build more alternative routes for exporting its vast energy resources.

German Gref, who took part in top-level negotiations that concluded late Friday, said it will take years for Russia to overcome European fears about Moscow's dependability as an energy supplier, which had already been damaged by last year's price dispute with Ukraine. That dispute resulted in temporary shortages of Russian gas to European customers.

"The (reputation) that we enjoyed has been undermined to some degree, and it must be repaired. And how can you measure damage to one's reputation?" said Gref, Russia's trade and economic development minister. "We perfectly understand the damage that we have suffered."

Russia on Monday stopped shipping oil to Europe through a major pipeline that crosses Belarus. Moscow accused Minsk of siphoning off oil to cover a transit fee it had imposed in response to a duty Russia placed on oil exports to Belarus. Germany, Poland and other European countries saw a disruption in oil supplies as a result.

Russian oil shipments resumed early Thursday after Belarus lifted the transit fee, and the two countries agreed Friday to lower the Russian export duty by about 70 percent. They also agreed that Russia would get the lion's share of profits from refined oil products Belarus makes using Russian oil and then sells to Europe.

Gref said European consumers realize that Russia was not at fault for the disruption and that the country's image should improve in the coming years if Russia avoids such incidents and creates more alternative supply routes for oil and gas.

"They are able to understand that it was not our fault that the situation was created and that we should create a position so that there will be no more such precedents," he said.

"We must create a system so that supplies depend only on us, not on transit partners," Gref said.

In Minsk, meanwhile, Belarusian Vice President Andrei Kobyakov said that the agreement was a fair deal, even though the country stands to sacrifice billions in revenues from refined oil products. He also said the government did not expect domestic consumer or producer prices to rise.

"The agreement was balanced. This was not a concession, it was the civilized way to resolve the question. This agreement is the most fair and it will prevent escalation," Kobyakov told reporters.

"The deal will not bring serious, or tremendous, change to Belarus. We don't expect any damage for (Belarusian) oil companies," he said.

Kobyakov said Belarus will garner US$1.5 billion (?1.2 billion) in revenue this year under the new arrangement - less than half what it was previously earning.

Belarusian analyst Yaroslav Romanchuk, however, said the loss in revenue from re-exported oil products and the cost from higher natural gas costs could total up to 8 percent of the country's GDP. Russia this year also doubled the price it charges Belarus for natural gas.

"In essence, this will catalyze market reforms in Belarus, but whether this will suit the Belarusian leadership is an open question," Romanchuk told The Associated Press.

European officials have watched the disruption with concern, voicing anew worries about Russia's reliability as an energy supplier. The United States and others in the West - who have made Belarus and its harshly repressive president a pariah - have also accused Russia of trying to use its vast energy resources as a political weapon.

Javier Solana, the European Union's foreign affairs chief, said in a statement that the bloc welcomed the agreement, but said the disruption "points to the need for a better understanding between the European Union and Russia on the basic principles of a future energy partnership."

Associated Press Writer Yuras Karmanu contributed to this report from Minsk, Belarus.

Source:

http://www.iht.com/articles/ap/2007/01/13/europe/EU-GEN-Russia-Belarus-Oil.php

Google
 


Partners:
Face.by Social Network
Face.by