BELARUS NEWS AND ANALYSIS

DATE:

24/07/2007

Belarus purges its gas and oil chiefs

By Andrei Makhovsky for Reuters

Belarus's president fired the heads of leading state energy companies on Monday for failing to avert an energy shock caused by Russia's sudden rising of gas prices.

The office of Alexander Lukashenko announced the sackings as Belarusian officials held crisis talks at the headquarters of Gazprom over an unpaid gas debt of $500m (?362m, ?243m).

The Russian gas monopoly more than doubled the price it charges Belarus to $100 per 1,000 cubic metres after a bruising dispute that in January interrupted supplies of crude oil to major European countries.

But the full impact of the rise kicked in this month and Belarus, an isolated state of 10m sandwiched between Russia and the European Union's eastern frontier, failed to settle the debt by Monday's deadline.

"No economy could cope with such a sharp rise in the prices of energy resources," the president's press service quoted him as saying.

Mr Lukashenko sacked the heads of Belneftekhim, the petrochemicals company, gas pipeline group Beltransgas and Belarussian Oil Company, the state oil and refined products trader.

Last week the head of the KGB security service was replaced by Lukashenko's chief bodyguard.

Russian media have speculated that Sergei Sidorsky's prime ministership could also be on the line.

The head of Beltransgas, Dmitry Kazakov, will be replaced by Vladimir Mayorov, a regional governor.

Vladimir Zubkov heads the Belarussian Oil Company after Alexander Borovsky was arrested on suspicion of corruption.

Vladimir Kazakevich, the government's chief of staff, becomes head of Belneftekhim, which controls two oil refineries with capacity of 400,000 barrels per day.

Mr Lukashenko's press office said the president hoped the new Belneftekhim boss would "draw the appropriate conclusions from previous management and restore iron order".

Russia raised gas prices and slapped duties on crude after Vladimir Putin complained that Moscow was subsidising Belarus by billions of dollars a year.

European buyers pay about $250 per 1,000 cubic metres for Russian gas. The heavily industrialised Belarussian economy, still run along the lines of the Soviet command economy, has struggled to cope with the extra cost and has cast around for debt financing.

"We should have paid before July 23 but haven't paid so far," said a spokesman for Alexander Ozerets after the energy minister flew to Moscow for talks.

"The delegation is here, at Gazprom. Talks are continuing, but we can confirm that the deadline was missed," the Russian company said. Officials declined to say how long the talks might last.

Relations between Gaz-prom and Belarus are watched by market analysts and politicians. Rows between the two sides have threatened to cut flows of gas to Europe several times in the past few years.

About 20 per cent of Russian gas exports, mainly to Poland and Germany, pass through Belarus. The rest goes via Ukraine. Russia supplies about a quarter of Europe's gas needs.

The latest pricing dispute with Belarus was in December after Gazprom threatened to raise prices amid worsening political relations with Minsk.

Additional reporting by Dmitry Zhdannikov

Source:

http://www.euro2day.gr/articlesfna/39551377/

Google