BELARUS NEWS AND ANALYSIS

DATE:

08/01/2007

Belarus-Russia Row Cuts Oil Flow to Germany, Poland

By Katya Andrusz and Katarzyna Klimasinska

Jan. 8 (Bloomberg) -- Russian crude oil supplies to Poland and Germany were halted following a dispute between Russia and Belarus, the Polish company that operates the pipeline said.

PERN Przyjazn SA, the pipeline operator, and Grupa Lotos SA, Poland's second-largest refiner, said supplies via the Druzhba pipeline that transports Russian crude via Belarus were cut off last night.

``This is most probably related to the Belarus-Russia conflict over fees for oil transit,'' Deputy Economy Minister Piotr Naimski said in a phone interview from Warsaw. ``This shows that oil supplies from this direction are untrustworthy,'' he said, adding that Poland has reserves to cover 80 days' demand and will bring in crude by sea.

Belarus, a close ally of Russia, is protesting Russian plans to raise gas prices to market levels and has imposed a duty on oil transit that Russia says violates trade agreements. Poland's government wants to reduce energy dependence on Russia. It will ``certainly'' intensify its efforts to find other supplies after the cutoff, Naimski said.

Naimski will hold a press conference on the matter at 1 p.m. in Warsaw, the ministry said.

PKN Orlen SA, Poland's largest oil company, had no immediate comment on the matter and is seeking more information, spokesman Dawid Piekarz said.

Source:

http://www.bloomberg.com/apps/news?pid=20601100&sid=a5Q16emwPKvo&refer=germany