BELARUS NEWS AND ANALYSIS

DATE:

10/01/2007

Russia seeking alternative routes amid row with Belarus

President Vladimir Putin ordered the government yesterday to consider cutting the country's oil production amid a trade dispute over oil with Belarus, and a government minister said Russia is seeking alternative routes for its crude exports to Europe that bypass the eastern neighbor.

Russia and Belarus have been at loggerheads over the transit of Russian crude oil through Belarus to western Europe. Transit shipments along the Druzhba pipeline were halted over the weekend, affecting Poland, Germany and Hungary.

Industry and Energy Minister Viktor Khristenko, quoted by the Interfax news agency, confirmed on Tuesday that Russian pipeline operator Transneft, which accused Belarus of siphoning off Russian oil meant for consumers in western Europe, stopped pumping oil to the pipeline Monday morning.

Putin instructed the government "to discuss with Russian companies the possibility of reducing oil production in connection with the problems emerging in the transportation of oil via Belarus," the Itar-Tass news agency reported.

Russia provides about a quarter of the oil and gas consumed in the European Union (EU), some of which is piped through Belarus, mainly to Poland, Germany and Lithuania. EU Energy Commissioner Andris Piebalgs said on Monday the disruption of Russian oil flow posed "no immediate risk" to energy supplies in the bloc.

"Everything necessary should be done to secure the interests of Western consumers" of Russian oil, Putin was quoted as saying at a cabinet meeting.

He asked government officials to continue talks with Belarus to resolve the dispute.

A Belarussian government delegation led by Deputy Prime Minister Andrei Kobyakov arrived in Moscow earlier on Tuesday for talks with Russian officials.

Economic Development and Trade Minister German Gref said after a meeting with Kobyakov that Russia will start negotiations with Belarus only after Minsk lifts a new customs duty on Russian oil piped through Belarus, which came after Moscow imposed export duties on crude oil supplied to Belarus at the start of the year.

Meanwhile, the government, Transneft and the state railways company are looking for routes for Russian oil exports to Europe that bypass Belarus, Gref was quoted by Interfax as saying.

The row over oil followed a dispute over natural gas supplies between the two countries. After tense negotiations that dragged on until New Year's Eve, Belarus agreed to pay more than double the previous price for Russian gas supplies this year.

Under a deal with Russian gas giant Gazprom, Belarus would buy Russian gas at 100 U.S. dollars per 1,000 cubic meters in 2007. The country bought gas from Gazprom at 46.7 dollars per 1,000 cubic meters last year.

Source:

http://english.eastday.com/eastday/englishedition/world/userobject1ai2557433.html