VARIOUS: Belarus said it had restarted the flow of Russian oil through a major pipeline across its territory, ending a three-day stoppage that rattled Europe

Record ID: 343376

  • Title: VARIOUS: Belarus said it had restarted the flow of Russian oil through a major pipeline across its territory, ending a three-day stoppage that rattled Europe
  • Date: 11th January 2007
  • Summary: (BN13) MINSK, BELARUS (JANUARY 10, 2007) (REUTERS) (SOUNDBITE) (Russian) BELARUSSIAN PRIME MINISTER SERGEI SIDORSKY SAYING: "The government just met to discuss the amount of duty levied on oil shipments through pipelines that belong to the Republic of Belarus. The government, taking into account existing agreements and the compromise reached by the two countries, has decid
  • Embargoed: 26th January 2007 12:00
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  • Topics: International Relations,Industry
  • Reuters ID: LVA7T3U4IJD31UXL5RQLFLGMFFR5
  • Story Text: Belarussian Prime Minister Sergei Sidorsky said on Wednesday (January 10) his government has scrapped transit duties on Russian oil, paving the way for the resumption of crude supplies to Europe.
    Sidorsky said he would fly to Moscow on Thursday (January 11) and expected the Russian side to respond by lifting all restrictions in its trade relations with Minsk.
    "The government just met to discuss the amount of duty levied on oil shipments through pipelines that belong to the Republic of Belarus. The government, taking into account existing agreements and the compromise reached by the two countries, has decided to annul the [previous] government decision to establish a duty [on oil shipments]. And we hope that in the next two days we will settle other issues regarding our trade relations --- questions about oil shipments to Belarus; the transit of oil through Belarus; and oil shipments to Belarus via Transneft that were made by contracts with Russian companies,' Sidorsky said.
    Moscow angered the European Union by cutting off all oil supplies on Sunday (January 7) night through Druzhba, which carries 1.5 million barrels per day of crude oil from Russia through Belarus to Europe -- about 10 percent of the EU's needs.
    EU leaders said the move made it harder to trust Russia as an energy supplier and berated Moscow and Minsk for failing to consult key customers like Germany before turning off the taps.
    Russia's envoy to the European Union, Vladimir Chizhov said later on Wednesday normal flows of Russian oil through the Belarussian pipeline could restart in a few hours. He also said Moscow's dispute with Minsk had been largely resolved.
    "Now this issue has been resolved and the demand that Transneft had been formulating that is to abrogate the decision on imposition of the so called transit duty and the release of the amount of oil misappropriated, those demands have been met so as things stand at this point in time I can say that the issue has been resolved," Chizhov said after talks with EU Commissioner Andris Piebalgs.
    European customers said crude could start flowing shortly and Russia's pipeline monopoly Transneft said normal operations would resume as soon as Belarus returned 80,000 tonnes of oil that Russia says it took illegally.
    Chivoz said the amount of oil which Belarus had diverted was already flowing through the Druzhba pipeline and that this would speed up the process of restoring a normal flow within hours. The flow has been interrupted for three-days.
    Piebalgs said he also expected the flows to begin a matter of hours and be running normally by Thursday (January 11) at the latest. But he repeated earlier calls for guarantees that such interruptions would not be repeated, or at least not without prior warning.
    "Let's see if it will be there but I think agenda will be as it stands. We have invited Russian partners to inform of the situation as Belarus partners so I think, even if flow is there, it is important to keep on agenda because it is also very important to get assurance that it will not happen again. This I think is very important. The damage is when something happens and then there is information vacuum and to restore it it will take quite some substantial time," Piebalgs said.
    He said prior warning would enable receiving countries to find alternative oil supplies although he insisted the EU wanted to continue using Russian oil.
    Speaking to Russian Television in Russian Piebalgs said the EU would only be satisfied once oil is flowing fully and freely through the Belarus pipeline.
    Among those who will be heaving a sigh of relief when the oil starts flowing again will be Germany, Europe's biggest economy. The pipeline, which provides the country with a fifth of their oil supply, carries oil across Belarus to Poland and Germany, supplying the Leuna and Schwedt refineries in eastern Germany.
    "We can guarantee absolutely that there will be enough oil. But nevertheless we appeal to the oil deliverers to stick to their contracts and to end this situation as soon as possible," Transport Minister Wolfgang Tiefensee said while visiting the Schwedt refinery.
    Germany is looking at ways for both Germany and the EU to reduce their dependency on Russian oil and gas exports by diversifying their mix of suppliers. Germany imports roughly 100 million tonnes of crude oil annually and 20 million flows through the Druzhba pipeline.
    Moscow said it was forced to act because Belarus was siphoning off oil from the pipeline illegally. Minsk claims the oil was meant to pay for a newly imposed transit tax.
    The dispute between the two erstwhile allies started last year when Russia demanded that Belarus paid more for its heavily subsidised gas supplies and gave up control of a key gas pipeline running across its territory.
    Transneft <TRNF_p.RTS> said earlier it expected to resume normal operations on the Druzhba pipeline -- which supplies around a tenth of Europe's oil needs -- around eight hours after Belarus turned on the taps.
    Belarussian President Alexander Lukashenko reached an understanding to resolve the halt during a telephone call with Kremlin leader Vladimir Putin, Lukashenko's office said.
    The shutdown marked the climax of a trade dispute in which Moscow doubled gas export prices to Belarus at the New Year and imposed a crippling crude oil export duty equivalent to 10 percent of the gross domestic product of its western neighbour.
    Minsk retaliated last week by imposing its own oil transit duty. Transneft shut off the oil flow on Sunday night, accusing Belarus of siphoning 80,000 tonnes of oil from the pipeline to take payment of the levy in kind.
    Minsk caved into pressure from Moscow after Putin said on Tuesday Russian oil firms should prepare to cut production if no compromise was reached, threatening prolonged supply cuts to Europe just a year after a Russia-Ukraine gas crisis. jrc/us
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