Updated at 02:07,12-08-2020

No breakthrough from Belarusian-Russian oil and gas talks in Sochi

Aliaksiej Areška, Naviny.by

No breakthrough from Belarusian-Russian oil and gas talks in Sochi
Photo by president.gov.by
The sides failed to agree on an oil price discount for Belarus.

“We cannot currently sharply change the terms governing our oil industry. Prices of crude oil are determined by the market and are not regulated administratively. Everything will remain as it is,” Dmitry Kozak, deputy head of Vladimir Putin’s presidential administration, told reporters following the talks, held in Russia’s Black Sea coastal city of Sochi.

“In order to grant a discount, we would have to introduce government regulation in the oil market, which we cannot do,” he said. “We cannot constantly change the rules of the game and put our oil companies in an unclear situation.”

“However, we will provide every kind of assistance to help Belarusian consumers and oil producers in our country reach agreements in order to supply Belarus with the necessary amount of oil,” Mr. Kozak said.

He also said that Russia would supply Belarus with natural gas this year under the same terms as it did in 2019.

“The talks were rather positive,” Mr. Kozak said. “We agreed to continue consultations at the level of the governments, ministries and agencies on the improvement of integration mechanisms.”

Russian oil companies stopped to supply oil to Belarus on January 1, after old contracts expired and the sides failed to negotiate prices for this year.

Minsk suggested that the premium paid to Russian suppliers for the supply of duty-free oil to Belarus should be abolished because Russia’s “tax maneuver” in the oil sector led to a rise in the price of oil for the Belarusian refineries.

Belarus reportedly paid an average price of $364 per ton in January-October 2019, with the premium being $10 per ton.

Safmar, a conglomerate controlled by the family of oil-to-real estate tycoon Mikhail Gutseriev, who is on friendly terms with Aliaksandr Lukašenka, remains the only oil supplier to Belarus.

Safmar’s companies Russneft and Neftisa reportedly plan to supply around 450,000 tons of oil to Belarus’ refineries in February, with around 100,000 tons of that to be delivered by rail.

This is still not enough to feed the two refineries in Belarus, which normally process around 1.5 million tons a month.

Russia reportedly supplied 18 million tons of oil to Belarus in 2019.