BELARUS NEWS AND ANALYSIS

DATE:

13/11/2006

Kremlin views union with Belarus as takeover, RBC Daily says

RBC, 13.11.2006, Moscow 09:56:08.Presidents of Russia and Belarus Vladimir Putin and Alexander Lukashenko met for talks in Moscow on November 10, 2005. On the eve of the talks, the Kremlin disclosed the main topic: cheap re-exports of Russian refined oil to Europe. However, this is not by far the chief issue of the Russian-Belarusian relations. Industry observers are positive that oil is just leverage used alongside other means against Lukashenko to make him hand over strategic assets to Russia, which will be given away sooner or later in any case. The oil problem underlies the whole of Russian-Belarusian relations, including the gas issue.

On November 3, Russia's Ambassador Alexander Surikov said that gas price may be raised to $140 for Belarus starting from 2007. This hike will impair the country's energy-intensive industries, above all the fertilizer sector, Belarus's main exporter. At that, even if Gazprom agrees to buy a 50-percent stake in Beltransgaz for $5bn, this would cover Belarus's losses from the price increase for a year and a half at the most. Belarus is struggling frantically to keep its independence. Lukashenko sought to gain free access to oil production for Belarusian companies, but failed. Belarus also failed to find cheap energy resources in Iran or Venezuela, and the threats to charge Russia for its military bases stationed in Belarus were to no effect either.

The talks lasted for 3 hours, and the official statement released afterwards said that the countries will ground its future relations "on market principles".

Source:

http://www.rbcnews.com/free/20061113095608.shtml