BELARUS NEWS AND ANALYSIS

DATE:

28/01/2010

Russia and Belarus sign deal and end dispute

Author: Lianna Brinded

Source: Energy Risk | 28 Jan 2010

Russia and Belarus have ended a dispute over oil supply by signing a deal on Russian oil deliveries for one-third of Belarus's import needs, confirms Russian deputy prime minister Igor Sechin on the country's government website.

Ending a month-long dispute that echoed previous energy contract disagreements with Ukraine, and raised fears European supplies could be threatened, Sechin said the documents signed include tax-free oil deliveries for Belarusian domestic use, but for the amount proposed by Moscow initially.

The amount Moscow will supply is 6.3 million tonnes per year, with zero duty provisioned for volumes re-exported back to Russia after being processed in Belarus.

"While Russia seems to have implemented all of its plans regarding duties for Belarus, the only meaningful concession Minsk appears to have won is an 11% hike in tariffs for Russian oil transits, but even this was lower than the rise it was initially gunning for," says Johannes Benigni, managing director at energy research group JBC Energy.

Sechin also said in the statement that he and his Belarussian counterpart had inked a joint declaration pledging uninterrupted transit of Russian oil across Belarus to third-party countries.

Russia ceased crude oil supplies to neighbouring Belarus after failing to agree on a renewed term on export tariffs that expired on New Year's Eve. However, analysts at the time viewed this differently from previous disagreements over gas supplies such as the halting of gas to Ukraine in January 2009.

"It would be a different story if we were talking about the gas markets, but oil is a globally liquid commodity, and with the spare capacity I think it will not have a massive impact on the prices in the medium term," said Jon Clark, oil and gas director at Ernst & Young, at the time of the announcement.

For further details on Russia's gas market see Will Russia leave Europe out in the cold in the February issue of Energy Risk and online at: www.energyrisk.com or www.risk.net

Source:

http://www.risk.net/energy-risk/news/1589171/russia-belarus-sign-deal-dispute


Partners:
Face.by Social Network
Face.by