BELARUS NEWS AND ANALYSIS

DATE:

23/01/2007

Belarusian leader vows to find alternative to oil imports from Russia

The Associated Press

MINSK, Belarus: Belaruisan President Alexander Lukashenko criticized Russia for a series of energy deals that have sharply raised prices and cut revenues for Belarus, vowing in a defiant speech Tuesday to find oil from other sources.

The two formerly close former Soviet allies have seen relations plummet in recent months amid a clash over Russian natural gas and oil supplies.

Lukashenko, who has relied on cheap Russian energy to fuel his country's centrally controlled economy, grudgingly agreed to pay more than twice the previous price for gas this year - and even more in coming years.

And two weeks ago, Russia forced Belarus to back down in a dispute over oil supplies and transit fees, forcing a deal that will reduce the profits Belarus makes by refining Russian oil and selling the products. The dispute briefly disrupted oil supplies to Europe.

Speaking during a visit to an oil refinery in Novopolotsk northeast of the capital Minsk, Lukashenko complained about the oil and the gas deals, saying that they were "extremely disadvantageous," and that the country could see up to US$3.5 billion (?2.68 billion) in losses.

He said the country intended to import oil through ports in neighboring Baltic countries using an upgraded pipeline to Novopolotsk; the government has said the upgrade could cost US$15 million (?11.5 million) to US$30 million (?23 million).

He also said Russia should pay transshipping oil and gas supplies to Europe.

"We should demand that they pay us - without fuss or ambition - along the principles of international law," he said.

"Russia has its own unique resource: hydrocarbons. Our strategic resource is our geopolitical position. We should use this just like Russia uses its resources," he said.

Earlier, Lukashenko vowed that Belarus would push ahead with a five-year plan to make the economy more efficient and would stick to ambitious economic growth targets. But he also warned that the country could be in for belt-tightening as a result of the energy price hikes.

Source:

http://www.iht.com/articles/ap/2007/01/23/business/EU-FIN-Belarus-Oil-Russia.php