BELARUS NEWS AND ANALYSIS

DATE:

07/11/2006

Russia Puts Off Discussion of Oil Shipments to Belarus Until Duty IssueResolved

MINSK. Nov 7 (Interfax) - Russia has postponed discussion of the balance of oil shipments to Belarus next year until the issue of unifying and sharing export duty for petroleum products is resolved, Russian Ambassador to Belarus Alexander Surikov said at a November 3 press conference in Minsk.

"The Industry and Energy Ministry has suggested postponing consideration of the balance until the division of export duty for petroleum products is resolved. The ministry wants to set single duty and share them at 85% for Russia and 15% for Belarus," eh said.

Surikov said Belarus produced 13.8 million tonnes of light petroleum products in the first nine months of the year. "I visited the Mozyr Oil Refinery just yesterday. It is operating at 25% profitability and posts $500 million in profit before customs duty," eh said, adding that Belarus should be interested in the refinery's stable operation.

As for a possible stop in oil supplies to Belarus if the country refuses to coordinate export duty, he said Russia would continue supplies for the domestic market.

Surikov said Belarus and Russia had no disagreements on unifying customs duty, but they have yet to agree on sharing the duty. "There is a second option - all light petroleum products except those used on the domestic market, are transferred to Russia," he said.

Surikov said Russian suppliers made shipments as required in the first nine months. "The balance of shipments coordinated by the prime ministers was 19.75 million tonnes. We were ahead for the first nine months. Belarus requested that. The remaining 3.4 million tonnes will be delivered in the fourth quarter," he said. "The commotioninthe media that we have reduced oil deliveries to Belarus is nothing more than idiotism," he said.

Surikov said the pipelines are old and there are some issues with the operators.

He said he discussed Belarussian participation in oil production in Russia. "It's not working yet. Russia is not ready to just led Belarussian companies or Russian companies have access to oil fields free of charge. All companies must participate in a tender," he said.

Belarussian oil companies are not ready to invest large sums in oil production, he said. "One well costs $2.5 million to produce 3,500 tonnes of oil," eh said. The joint participation of Belarussian and Russian oil companies in the development of Russian fields is being discussed, he said.

Source:

http://www.interfax.com/3/210374/news.aspx