Russia, Belarus oil supply talks halted: Agency

Negotiations between Russia and Belarus over the supply of Russian oil for 2010 have broken down after talks in Moscow, Belarus state news agency said.

Russia, Belarus oil supply talks halted: Agency

Negotiations between Russia and Belarus over the supply of Russian oil for 2010 have broken down after talks in Moscow, Belarus state news agency BelTA reported, quoting an unnamed source in the Belarussian delegation on Wednesday.

Russia briefly cut oil supplies to Belarussian refineries this month in a dispute over pricing that has again raised the spectre of winter supply disruptions for European Union customers.

"As a result of the work of experts, the two sides were close together," a source in the Belarussian delegation was quoted as saying, before the Russian officials took a break to report back to senior officials.

"Upon returning, the Russia's negotiators effectively renounced all agreements and returned to the position of the beginning of the year," the source was quoted as saying.

The Belarussian delegation flew to Moscow on Tuesday and held talks in the Russian Energy Ministry early on Wednesday, but will remain in Moscow, the Belarussian government spokesman told Reuters.

Earlier on Wednesday Belarus insisted that Russia should continue billions of dollars in oil subsidies, potentially complicating talks aimed at resolving a dispute that has raised the spectre of disruption to European Union supplies.

Russia briefly cut oil supplies to Belarussian refineries this month, helping to push U.S. crude prices on Tuesday to the highest close in 15 months, though there was no impact on transit flows to Europe.

Russia says Belarus should pay the full export duty while Belarus wants to keep the subsidies, which help prop up its $50 billion economy with the sale of oil products refined from imported Russian crude.

Russia allowed Belarus to import oil while paying just 35.6 percent of the current crude export tariff in 2009 though Moscow says Belarus should now pay full duties on the crude, which is then refined into oil products and sold for export by Belarus.

Russian Prime Minister Vladimir Putin has said Belarus can buy 6 million tonnes this year for domestic needs without paying duties.

But that leaves another 14.5 million tonnes of crude a year that Moscow says Belarus should pay at least the full $267 a tonne duty on, a potential additional annual payments for the Belarussian economy of at least $2.5 billion.

Russia has repeatedly clashed with its neighbours over energy pricing in recent years. A dispute with Ukraine last winter left EU customers without gas for almost two weeks in the dead of winter, severely straining ties with the European Union.

Russian Deputy Prime Minister Igor Sechin, who holds sway over the oil and gas sector of the world's biggest energy producer, said on Monday supplies along the Druzhba pipeline to Europe were continuing normally.

After a dispute with Belarus in 2007, Russia briefly cut off supplies along the pipeline. The Belarus arm of the pipeline transports about one-tenth of European supplies from the Russian oil fields of Western Siberia.

Belarus says about 68 million tonnes of oil is carried every year through Druzhba (which means "Friendship" in Russian) to European Union customers. The European Union consumed about 702.6 million tonnes of oil in 2008, according to the BP Statistical Review of World Energy.

In 2008, Germany received around 350,000 barrels per day (bpd) of crude via Druzhba, or just under 15 percent of its total consumption. Refineries belonging to Total, Shell and BP are among the biggest buyers of crude from Druzhba.

Poland imports around 400,000 bpd of crude via Druzhba for domestic refining, or more than three-quarters of its consumption, and exported another 90,000 bpd of Druzhba crude via the Baltic Sea port of Gdansk.

Reuters
Last Mod: 06 Ocak 2010, 20:46
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