VARIOUS: Crisis talks continue over cut-off of oil supplies to Europe as President Putin says Russia may cut output and meets Belarussian officials in Moscow for talks

Record ID: 343867

  • Title: VARIOUS: Crisis talks continue over cut-off of oil supplies to Europe as President Putin says Russia may cut output and meets Belarussian officials in Moscow for talks
  • Date: 10th January 2007
  • Summary: (W3) MOSCOW, RUSSIA (JANUARY 9, 2006) (AGENCY POOL) CABINET MEETING CHAIRED BY RUSSIAN PRESIDENT VLADIMIR PUTIN
  • Embargoed: 25th January 2007 12:00
  • Keywords:
  • Topics: International Relations,Energy
  • Reuters ID: LVA98MN50SI337JY7Q88LZ9PCDD0
  • Story Text: Belarussian officials arrived in Moscow for crisis talks on Tuesday (January 9) to end an impasse over the cut-off of oil supplies to Europe via a Russian pipeline that runs through Belarus, a former Soviet republic of 10 million people that is allied with Moscow.
    Russian pipeline monopoly Transneft admitted on Monday (January 8) it had shut off pipeline crude oil exports to Belarus in a move that halted transit deliveries to Poland and Germany.
    Transneft accused Belarus of stealing crude from the Druzhba (Friendship) pipeline and said it would try to reroute supplies to its European customers. Transneft President Semyon Vainshtok, speaking on the state-owned Rossiya television channel, blamed Belarus for the row on oil transit shipments from Russia.
    Belarus officials, however, rejected the charge, which was reminiscent of accusations levelled against Ukraine in January 2005 when Russian gas supplies to Europe were halted in a price dispute between Moscow and Kiev.
    "Unfortunately, despite the efforts that the Belarus republic made before the beginning of 2007 regarding duties on oil supplies to our refineries and those oil products which are then exported, our efforts unfortunately have not led to any concrete results," said Vladimir Naidunov, Belarus' deputy economics minister.
    "As we proposed earlier, Russia needs to abstain from placing a duty on those oil supplies that are being sent to Belarus refineries," said Naidunov. "And in return we should make an agreement with the Russian side for a plan that will then allow us to guarantee a sufficient level of oil exports with the payment of duties on those oil shipments that will be paid into the Russian and Belarus' budgets."
    Russian President Vladimir Putin said on Tuesday the world's second biggest oil exporter may cut output, signalling his resolve to force Belarus to climb down in a trade dispute that has halted a major oil pipeline to Europe.
    "It's necessary to continue negotiations with our Belarus partners to work out our relationship concerning the supply of our oil to Belarus and the transit of our oil to western consumers. It's necessary to protect the interests of Russian companies which are clearly facing certain losses, to guarantee fair conditions regarding the sale of oil on external markets, and to take a full list of measures that will minimise their losses," Putin said.
    As the impact of a two-day-old stoppage to the Druzhba pipeline spread across central and eastern Europe, Putin ordered his government to discuss possible production cuts by Russian oil firms.
    "I charge the government to devise a series of measures to protect the interests of the nation's economy," Putin added.
    European Commission President Jose Manuel Barroso and German Chancellor Angela Merkel said on Tuesday it was unacceptable for Russia to have closed off oil supplies to European nations without consultation.
    "While there is no immediate risk to supply, it is not acceptable for suppliers or transit countries to take measures without consultation. Of course this is a matter for concern," Barroso said in Berlin when asked about Russia's decision.
    "I support what Jose Manuel Barroso said, namely that it's unacceptable when there are no consultations on such actions. That hurts trust and it makes it difficult to build a cooperative relationship based on trust," Merkel added.
    The European Commission had earlier urged Russia and Belarus to settle the dispute quickly.
    "Russia has been supplying energy products to the European Union for 30 years without no problems. Certainly the problems that we with Ukraine and the problems that we are having now are going to do no good to Russia's reputation as a reliable supplier," EU Commission spokesman Ferran Tarradellas Espuny said.
    He said the interruption had affected several countries in the 27-nation bloc including Germany and Poland and added that European Energy Commissioner Andries Piebalgs had called for a meeting of the oil supply group on Thursday (January 11).
    The conflict is a continuation of an energy spat that began in December. At a few minutes before midnight on December 31, Belarus and Gazprom, Russia's state-controlled natural gas monopoly, signed agreement on natural gas deliveries.
    That agreement came just ten hours from a deadline that would have left Belarus without supplies of its major energy source and led to possible disruption of gas supplies to customers in the Europe Community.
    Russia is the world's second largest oil exporter and supplies around a fifth of Germany's needs. The Druzhba pipeline to Central Europe is one of the world's biggest.
    Despite the formal status of a federation that unites Belarus and Russia, relations between the two countries has been tense in recent months.

    AW/JRC
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