31 December 2006
Belarus suspends oil deals with Russian companies

The Belarusian State Petrochemical Industry Concern (Belneftekhim) has suspended all 2007 contracts with Russian oil companies, saying that the economy will suffer huge losses if Belarusian companies continue buying oil from Russia.

The move is linked to Russia's decision to impose an export duty of $180.1 per ton on crude oil delivered to Belarus.
Aleksandr Borovsky, head of the state conglomerate, described Moscow's decision as "inadequate." "The Russian government's decision raises concerns both from Belneftekhim and Russian oil companies," official information sources quoted him as saying in Minsk on Saturday.

The official stressed that the duty imposition did not serve the interests of Russian oil producers, which he said maintain active contacts with Belarusian enterprises.

Mr. Borovsky acknowledged that Belarus' two oil refineries would have to scale down their production following the suspension of the supplies. "This step on the part of Russia is simply beyond assessment, considering the fact that we are building a Union State," he noted.

The Belneftekhim chief predicted that Moscow's decision would hurt contacts between Belarusian petrochemical companies and Russian enterprises. In particular, he said, Gazprom-controlled Sibur supplies Novopolotsk-based Polimir with gas and petrochemical materials and buys chemical products from the Belarusian company.

"If Russia had warned us at least six months before, we would have been prepared for the step," Mr. Borovsky noted. "Now the heads of the Russian companies Surgutneft, Lukoil, Rusneft are making a helpless gesture, wondering how we should work in the future. What, did they decide to bring their economy to a standstill as well?" //BelaPAN