Agreement On Russian Oil Delivieries May Be Signed This Week

A preliminary agreement on deliveries of Russian crude oil to Belarus in 2010 may be signed in Moscow on December 30 or 31, RIA Novosti quoted Russian Deputy Prime Minister Igor Sechin as saying in Vladivostok on Monday.

Talks are under way to reach an agreement on the Russian exports.

Oil deliveries to Belarus will not be stopped even if no agreement in this regard is signed before the end of this year, Russian Ambassador Aleksandr Surikov said last week. "If the agreement fails to be signed, the task is to at least sign protocols that would guarantee the supply of oil after January 1," he said. "The agreement can be signed later."

The parties have to agree on the amount of oil to be supplied to Belarus duty free for domestic consumption, Mr. Surikov said, adding that duty-free deliveries might range between five million to nine million tons.

Russia`s export duty rate for Belarus is 35.6 percent of the rate applied to oil exports to other countries at present, but Russia wants Belarus to start paying the full rate in 2010. Moscow says that the current arrangement with Belarus puts Russian oil refineries at a disadvantage compared with Belarusian ones.
Next year’s deliveries of Russian natural gas and crude oil to Belarus should be mutually beneficial, Mr. Surikov said last week. He denied media reports that Russian authorities made the price of crude oil for Belarus conditional on Minsk’s consent for Russian companies to gain control of Belarus’ Naftan refinery.

"One should not build economic cooperation at the partner’s expense," Mr. Sechin said on December 18. "One cannot always win and the other always lose in business. One may lose the partner – as far as winners and losers are concerned."

Back in 1995, Belarus and Russia agreed to share revenues from a petroleum export duty. In exchange for cheap oil, Belarus promised to give Russia 85 percent of the revenues and leave 15 percent in its budget. Later, Russian officials accused Belarus of failing to transfer Russia`s share, which amounted to $3 billion to $4 billion a year, since 2001.

To recover the money Russia imposed an export duty on crude oil, collecting it before crude oil flows to Belarus as a guarantee against non-payment.

However, the export duty accord expires next year.

Mr. Shechin warned that Russia would charge a duty on all oil deliveries to the Belarusian refineries if the deal is not reached before the end of the year.