BELARUS NEWS AND ANALYSIS

DATE:

09/01/2007

Russia to Lose $3.3bn from Gas Agreements with Belarus, Putin Said

The losses incurred by Russia's economy from gas agreements with Belarus will amount to $3.3 billion, President Vladimir Putin told the cabinet, RIA Novosti reported. Of this amount, the state budget will lose $1.3 billion, while the losses of Gazprom will reach $2 billion.

"It is Russia's payment for transition to market relations and direct support of Belarus' colleagues," Putin specified when meeting the ministers just before the start of the crude duties negotiations with Belarus.

By buying out 50 percent in Beltransgaz, Gazprom hasn't gained control over the company, Putin said, emphasizing that Russia has yielded to the highest estimate of $5 billion and will pay $2.5 billion for a half of the stake. "In substance, it is another measure in support of Belarus' colleagues," the president said.

Putin emphasized the need to do utmost to secure the interests of western consumers of Russia's energy and committed the cabinet to proceed with negotiations with Belarus.

At the same time, Putin told ministers to discuss with oil companies of Russia the possible reduction in crude production in view of the gas transit problems with Belarus.

Source:

http://www.kommersant.com/p-9821/Crude_losses_Beltransgaz/