BELARUS NEWS AND ANALYSIS

DATE:

10/01/2007

Official: Russia, Belarus near oil deal

BRUSSELS, Belgium

Russia and Belarus were "very close" to solving an oil dispute and Europe's supply should be restored shortly, EU energy chief Andris Piebalgs said Thursday after meeting with a senior Russian official.

Russia's ambassador to the EU, Vladimir Chizhov, told reporters that Russian oil supplier Transneft had been forced to cut off supplies because Belarus had arbitrarily "misappropriated" oil.

Belarus was now restoring the oil and supplies should be back to normal within a few hours, he said.

Belarus' government moved to dissolve the dispute by canceling a transit tax on Russian oil shipments. A top Kremlin official called the decision "cause for restrained optimism."

Earlier Wednesday, EU Commission President Jose Manuel Barroso had branded the supply dispute as "unacceptable" and bad for both Russia's and Belarus' credibility as suppliers and transit countries.

On Monday, Russia stopped pumping oil to Europe via the Druzhba, or Friendship, pipeline that crosses Belarus, accusing its neighbor of siphoning off oil. By Tuesday, the stoppage had affected supplies to Ukraine, Germany, Poland, Hungary, the Czech Republic and Slovakia.

Minsk, whose centrally controlled economy is heavily reliant on cheap Russian energy and duty-free trade with Russia, last week slapped a US$45 per ton tax on Russian oil pumped across Belarus to Europe.

Source:

http://www.businessweek.com/ap/financialnews/D8MIIRI00.htm