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Belarus, Russia sign oil deliveries protocol

First Vice-Premier of Belarus Vladimir Semashko and Vice-Premier of Russia Igor Sechin have reached a final agreement on the deliveries of Russian oil to Belarus on 27 January.

The sides signed a protocol to the 2007 agreement which had regulated oil supplies to Belarus and the allocation of export duties on oil and oil products between the two countries over the last three years.

Apart from that, the parties signed a balance sheet on oil supplies and agreed on the methods to calculate the cost of Russian oil transit via Belarus.

Vladimir Semashko informed that Belarus will receive 6.3 million tones of Russian oil duty-free. “We managed to demonstrate that Belarus’ domestic oil needs make up 6.3 million tones, not 5 million tones, excluding domestic oil production. The amount involved is $400 million,” the First Vice-Premier told reporters.

He emphasized that these arrangements give an opportunity to considerably increase the stipulated amount of duty-free oil due to the following factors. First, by 1 October the growth rate of the Belarusian economy will be estimated (it may reach 10-11% in 2010), giving the Belarusian side the right to proportionally increase the quota for duty-free oil deliveries. Second, the duties will not be levied on the Russian oil that will be pumped to the Belarusian oil refineries and then exported to Russia in form of oil products.

Apart from that, Vladimir Semashko reminded that in the recent years Belarus and Russia have been using the following cooperation scheme: Belarus refines half of Russia’s oil using the own funds of Belarusian enterprises, the other half is give-and-take oil of Russian companies. According to the First Vice Premier, the sides agreed that Belarus will not change the operation terms for the Russian companies on a condition that the oil products will be pumped back to Russia. Respectively, no duties will be imposed on give-and-take oil.

The terms the sides have agreed on are close to those that were in effect in 2009. “Due to the agreements reached, Belarus’ budget losses will not be as great as expected,” Vladimir Semashko added.

Belarus will keep insisting on the abolition of oil duties within the framework of the Customs Union, First Vice-Premier of Belarus said.

Vladimir Semashko is convinced that in the Customs Union the terms of oil deliveries agreed on in Moscow on 27 January “will be short-lived” for some objective reasons.

“In mid 2010 when the single customs territory is set up, it will appear nonsense that something is delivered duty-free and something on quote rates, and overall we will find a great number of duties. I think that the Russian side understands that and will make drastic changes in the agreements that have been reached,” Vladimir Semashko said.

The rate for the Russian oil transit via the Belarusian territory will be increased by 11%, First Vice-Premier told.

Vladimir Semashko said that the Belarusian side has an opportunity to significantly raise the rate for the Russian oil transit as early as in October 2010. He informed that the sides have adopted the methods to calculate the cost of transit.

The First Vice Premier added that in case Russia does not agree with the calculations presented by the Belarusian side, Belarus will increase the transit rate taking into consideration the inflation rate in Russia plus 3%. “Even this amount is rather big,” Vladimir Semashko underlined.

Belarus and Russia have guaranteed uninterrupted oil deliveries to Europe in a joint statement signed by First Vice-Premier of Belarus Vladimir Semashko and Russian Vice-Premier Igor Sechin in Moscow on 27 January.

Vladimir Semashko told Belarusian reporters that this statement is aimed to dispel anxieties caused by the protracted Belarus-Russia oil talks. He emphasized that there were no grounds to worry. Vladimir Semashko reminded that when in early January the Russian side stopped pumping oil to Belarusian oil refineries, Belarus maintained smooth oil transit to European consumers.

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