BELARUS NEWS AND ANALYSIS

DATE:

07/03/2007

LUKOIL Won't Deliver Crude to Belarus Refineries in March

Russia's oil blockbuster, LUKOIL, won't deliver crude to Belarus refineries in March, a source at one of the refineries said on condition of anonymity. Previously, the refineries used to monthly get roughly 300,000 tons of crude from LUKOIL, PRIME-TASS reported.

The arguments of LUKOIL that is the biggest crude supplier to Belarus under the give-and-take basis are the absence of clear regulations for petroleum market of that country following the changes in terms for crude deliveries introduced in 2007.

Because of the changes, LUKOIL is yet unable to calculate the business efficiency of February refining, the source said. Under the new terms of pricing crude deliveries to Belarus in 2007, the results of the company's work will be known only by mid.-March, once the average price of spot deals is finally calculated based on the previous month.

LUKOIL's refusal means the refineries of Belarus will have to buy huge amount of crude, which calls for additional money, the analysts estimate. Mozyrsky NPZ refinery, for instance, plans to buy 463,000 tons in March, roughly 100,000 tons more than before. Slavneft-Start will supply around 200,000 tons, Invest-M will provide around 90,000 tons and Belorusneft will ensure around 100,000 tons. But LUKOIL may think better later on, the source hoped.

Source:

http://www.kommersant.com/p-10263/crude_refineries/