Belarus-Russia talks on oil supplies in 2016 expected to end in December

Negotiations on terms of Russian oil deliveries to Belarus in 2016 are expected to be finished in December, BelTA learned from the press service of the Belarusian petrochemical concern Belneftekhim.

According to the source, this week Belneftekhim and the Belarusian oil refineries continue yearly negotiations with the Russian oil companies that supply oil to the Belarusian oil refineries for the sake of discussing terms of next year’s deliveries. The negotiations with the oil companies are proceeding in a productive manner. The negotiations are expected to be finished in December.

Belneftekhim pointed out that the routine talks are supposed to optimize interaction between the sides and work out mutually beneficial terms of cooperation with regard t oil processing.

The Belneftekhim press service stated that a number of events that fundamentally affected the state of the oil market happened in the international political and economic scene in 2015. As a result, oil exchange quotations have dropped considerably. Nevertheless, the price for the oil Belarus buys from Russia has increased in commensurable conditions due to changes in taxation of the Russian oil industry. Year after year the quality parameters of Russian oil get worse, thus inflating the cost of oil processing, which is required to make European-quality products, BelTA has been told.

The source underlined that the Belarusian oil refineries have been considerably upgraded in the last few years. Thanks to the commissioning of new manufacturing assets at Naftan and Mozyr Oil Refinery Russian customers, who offer oil on commission to the Belarusian refineries, get considerably more value out of the oil products they get in return. In particular, these matters have already been discussed during meetings of Deputy Prime Minister of Belarus Vladimir Semashko and Vice Prime Minister of Russia Arkady Dvorkovich.

Recently commenting on mass media reports of Belarus suggesting a revision of the oil pricing formula to Russian suppliers, Vladimir Semashko noted that there are grounds for discussing the price for the oil Belarus buys. “The prices have plunged. There are reasons for discussing at what prices oil should be supplied and bought. A working group has been set up, it is carrying out an analysis,” noted the Deputy Prime Minister of Belarus. Among other people the group includes representatives of Lukoil, Surgutneftegas, Gazpromneft, Rosneft and Belneftekhim.

BelTA reported earlier that Belarus and Russia have agreed that the former will get 24 million tonnes of oil in 2016 or 1 million tonnes more than in 2015. The entire volume is supposed to be delivered via pipelines. According to the indicative fuel and energy trade figures, in 2015 Russia will supply 23 million tonnes of oil to Belarus, including 22 million tonnes via pipeline transport.