BELARUS NEWS AND ANALYSIS

DATE:

10/01/2007

Belarusian president says reached compromise in oil dispute with Russia

MINSK, Jan 10 (Prime-Tass) -- Russian President Vladimir Putin and his Belarusian counterpart Alexander Lukashenko reached Wednesday a compromise in an oil dispute between the two countries, Lukashenko's press office reported.

The compromise, which was agreed on during a telephone conversation, will resolve the countries' dispute over Russian energy exports to Belarus, the Belarusian president's press office said.

The prime ministers of Russia and Belarus have been instructed to draft proposals addressing these issues and submit them to the presidents by Friday, the press office said.

On Monday, Belarus interrupted Russian oil deliveries to Europe via the Druzhba, or Friendship, pipeline before Russia's state-controlled oil pipeline monopoly Transneft stopped pumping its oil to Belarus as well. Belarus seized some of the oil transited, claiming it was not properly cleared by its customs authorities following the introduction of a U.S. $45 per tonne customs duty on transited oil, while Russia accused the former Soviet republic of stealing the oil.

The Druzhba oil pipeline delivers about half of Russia's oil supplies to the E.U. or about 12.5% of E.U. oil consumption.

The oil transit duty was introduced after Russia in December 2006 slapped a $180.7 per tonne duty on oil exports to Belarus, which previously enjoyed duty-free supplies and benefited from refining Russian crude and subsequently exporting oil products. Russian officials, including President Putin, claimed that the duty-free arrangement cost Russian between $3.5 billion and $4 billion annually.

The conflict between Russia and Belarus comes on the heels of a months-long dispute over the price of Russian natural gas exports to Belarus. In late December, Russia and Belarus reached a deal under which the price of Russian gas supplies and the price Russia pays for gas transit via Belarus were hiked. The Belarusian government also agreed to sell a 50% stake in Belarus' gas pipeline monopoly Beltransgaz to Russia's natural gas monopoly Gazprom, which is expected to pay for the stake with gas supplies in four years.

Source:

http://www.prime-tass.com/news/show.asp?topicid=0&id=412809