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Global General

Moscow, Minsk to continue oil talks

(Xinhua)
Updated: 2010-01-27 09:19
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MOSCOW: Russia and Belarus will continue crude delivery negotiations on Wednesday, news agencies reported Tuesday citing a source from the Russian government press office.

A Belarusian delegation led by First Deputy Prime Minister Vladimir Semashko started oil supply talks with a Russian delegation led by Deputy Prime Minister Igor Sechin here on Monday.

According to the unnamed source, "despite the difficult negotiations, it is possible to sign bilateral documents if Russia makes a minimal compromise and the Belarusian delegation has relevant powers."

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Minsk, reportedly displaying no flexibility, has brought up several new offers during the talks, he said, including those changing the give-and-take formula and the amount of crude consumption.

Meanwhile, according to Russia's oil pipeline monopoly Transneft, one stumbling block barring the two sides from clinching a deal was the question of crude transit charges.

The source also warned Minsk's possible siphoning off Russian crude oil deliveries to Europe, given the fact that Belarusian crude reserves merely suffice for another week.

The negotiations have so far been mired into deadlock as neither side was willing to concede.

Belarus imported about 20 million metric tons of Russian oil last year at only 35.6 percent of the current crude export duty, which stands at US$267 per metric ton as of January 1. The transit country consumes about a quarter of the Russian oil deliveries with the rest processed and pumped to the West.

Belarus was seeking a similar discount for 2010 but failed to strike a new agreement with Russia before the previous accord expired at the end of December.

Russia says it has offered to continue "preferential" terms this year, which allow Belarus to buy 6 million tons of crude for domestic consumption without tariffs but demand full import duties on some 14.5 million tons of oil bound for European markets.

Belarus insists all Russian crude should be duty-free, citing an agreement on customs union signed late last year.

The standoff has thus raised concerns over potential supply cuts to Belarus and the European Union.

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