BELARUS NEWS AND ANALYSIS

DATE:

10/01/2007

Russia, Belarus to resolve oil gridlock Friday

Russia and Belarus agreed to resolve a dispute over oil duties that forced Russia to turn off oil flow in its main export pipeline Druzhba (Friendship) to Europe, Belarusian President Alexander Lukashenko said on his website on Wednesday. Russia stopped pumping crude into Druzhba on Monday and Hungary has already decided to tap strategic oil reserves to allow uninterrupted operation at MOL's refinery.

The President's official site said Lukashenko had a "long telephone talk" with his Russian counterpart Vladimir Putin and addressed "the problems in the interrelationship of both states in the trade and economic field."

Specifically, the subject raised was the provision of Belarus with energy resources and the supplies of hydrocarbon raw materials to the countries of Europe.

"A compromise has been reached at as a result of the talks which will make it possible to break the deadlock situation concerning, among other things, the transit of Russian oil to the countries of Europe via the territory of Belarus," the President's office added.

Documentation allowing the oil flow to resume through the Druzhba pipeline - which crosses Belarus - would be signed by Friday, the statement said.

According to BBC, the Kremlin refused to confirm a deal, but did say the two sides had spoken. Bloomberg reported that the Kremlin later issued a one-sentence statement saying only that Lukashenko initiated the call and that the two leaders discussed "problems of the transit of Russian oil."

Russia closed the pipeline on Monday after it accused Belarus, a former member of the Soviet bloc, of stealing oil supplies in retaliation for a new export tax on supplies to Belarus. Belarus in turn said it would charge a transit fee on the 1.4 million barrels a day flowing through the pipeline, equal to 15% of Russia's total output.

The shutoff led to a cut in supplies to refineries across central Europe, including Germany, Poland, Slovakia and Hungary, forcing those countries to tap stockpiles and renewing concern about dependency on Russian energy.

Source:

http://www.portfolio.hu/en/cikkek.tdp?cCheck=1&k=2&i=10700