Moscow Tightens Squeeze on Belarus Oil Industry

The Russian government threatens Belarus with an imminent cessation of oil supplies to the country’s two big refineries, Mozyr and Navapolatsk (aggregate capacity at least 25 million tons annually).

The declared trigger of this threat is the dispute over Russian taxation of oil deliveries to Belarus (EDM, January 5). The undeclared motivation, however, is to pave the way for a Russian takeover of Belarus refineries and, in a follow-up stage, Russian control of the Belarus Druzhba oil transit pipelines to Europe.

According to Russian pipeline monopoly Transneft’s chief spokesman Igor Demin, oil supply volumes from Russia are running out at this week’s end for the Mozyr refinery, and one week later for the Navapolatsk refinery. At that point “there will be nothing to pump,” the spokesman warned. Russian oil producing companies have stopped submitting applications to transport their oil to Belarus through Transneft pipelines (Interfax, January 13, 14).

Russian oil companies use the Belarus refineries for processing more than 20 million tons of Russian crude annually. Rosneft and Lukoil (in that order) are the main users in terms of annual volumes. The Russian government and companies have pressed Minsk since at least 2008 to negotiate the terms of transferring the refineries to Russian control. Russian First Deputy Prime Minister Igor Sechin, who coordinates the ongoing negotiations with Belarus on oil supplies, is concurrently the chairman of the board of Rosneft.

Effective on January 1, the Russian government has withdrawn most of its indirect subsidies to the Belarus oil processing industry. Those subsidies came in the form of slashing the Russian export duties on the oil delivered to Belarus refineries (EDM, January 8).

Russian oil companies had almost certainly received their share of profits from Belarus’ highly lucrative exports of oil derivatives in recent years. The Russian government’s move on export duties, however, indicates that it seeks outright control of that industry in Belarus. By withdrawing the previous form of subsidy on crude oil, Moscow would drastically cut the Belarus refineries’ profit margins and turn them into easy targets for a Russian takeover.

If this scenario unfolds as apparently intended, Belarus would no longer earn the necessary revenue for upkeep of the Druzhba oil transit pipeline’s Belarus section. Minsk would have to turn to Moscow for financing that pipeline’s maintenance and modernization. That section carries a staggering amount of more than 70 million tons of Russian oil annually to European Union countries. Moscow would like to control the transit pipeline itself for added leverage in Europe.

The Belarus state holding Belnaftakhim owns the refineries and the Druzhba pipeline on Belarus territory. If deprived of revenue from the processing plants, Belnaftakhim could end up in the same situation as Naftohaz Ukrainy: unable to invest in the transit pipelines’ modernization and vulnerable to Russian takeover of the transit system.

President Alyaksandr Lukashenka’s government has tried to resist a Russian takeover of the refineries and, as a fallback position, to bargain over the terms. Moscow escalated the crisis on January 1 by cutting deeply into the refineries’ income, and thus also into Minsk’s tax base. It now threatens a further escalation through a possible suspension of oil supplies altogether.

Russia-Belarus inter-governmental negotiations over the oil export duty broke down in Moscow on January 9. Three days later, Lukashenka sent an explanatory letter to Russian President Dmitry Medvedev (Interfax, January 12). Belarus state media describe the situation less diplomatically:

“Russian officials are impervious to any arguments, they only pressure the [Belarus] negotiators: ‘sign, or the terms would be worse tomorrow.’ Certain people in the Russian government are resorting to a typical raiding [reyderstvo, Russian underworld expropriation] operation … Russian companies dream of privatizing the two Belarus refineries by Russian methods, for a song and without any further commitments. Moreover, Moscow is interested in controlling our [oil] transit pipelines” (Belarus state radio, January 11).

Moscow proposes to maintain the low export duty on the oil volume necessary for Belarus’ internal requirements only; and to impose the full export duty on the much larger oil volume being processed in Belarus for the export of refined products. The two volumes are 6 million tons and 15 million tons, respectively, per year. Should Minsk reject this arrangement, Moscow threatens to subject the aggregate quantity of 21.5 million tons to the full export duty. The negotiations broke down at that point on January 9. Moscow is now escalating further by threatening to suspend all deliveries.

Source:georgiandaily.com/i

Belarus defender Dmitry Verkhovtsov desperate to join Celtic

Tony Mowbray met Dmitry Verkhovtsov yesterday to get the measure of the Belarus defender he can purchase for £500,000, but the Celtic manager has warned that his January transfer window activity will not be conducted at the expense of selling his title ambitions short.

Mowbray is eager to trim the Celtic squad, not only to allow fringe players to find first-team football elsewhere, but to free up wages that can be made available to new recruits. However, he insisted yesterday that his aim is to “balance” the financial and football aspirations.

So while 23-year-old Verkhovstov, who trained with Celtic yesterday at their Lennoxtown complex after arriving from Belarus on Sunday, could conclude a deal that sees the 12-times capped centre back move from Naftan Novopolotsk, Mowbray is in no mood to offload players with the Clydesdale Bank Premier League championship still a potential prize.

Numerous suitors are keen on his players, notably Aiden McGeady, who was linked with Everton on Sunday, and Arthur Boruc, the Poland goalkeeper, who is of interest to Tottenham Hotspur. Gary Caldwell is also a signing target for Gordon Strachan, the man who took him to Celtic Park and is now Barry Robson, Scott McDonald, Paul Caddis and Chris Killen are also reported to interest several English sides.

Mowbray said yesterday, however: “It’s a wait-and-see scenario. It’s about balancing your squad, and balancing what comes in as opposed to what might go out.

“We have to make sure we don’t leave any gaping holes in the squad and that all areas are covered for injuries or fatigue or suspension. There will be inquiries for some of our players, of course. But we will decide when the other people come in if we let them go out or not.”

Mowbray has just purchased Ki Sung Yueng, the South Korea midfield player, for £2 million from FC Seoul and Verkhovtsov hopes that he will be next. The Belarus defender said: “I’m confident the deal will go through. I’ll need a work visa, but I’m sure it will be OK.”

The area in his team that Mowbray is most keen to improve is central defence. Caldwell is in the last six months of his contract and has not signed a new deal, prompting the belief that Celtic will try to obtain a fee for him now. That is why Mowbray is also assessing Matthew Kilgallon, Sheffield United’s central defender, whose situation mirrors Caldwell’s in that the 25-year-old is free to sign a pre-contract agreement from Friday, and the Coca-Cola Championship club may also opt to receive some compensation now.

Verkhovstov caught Celtic’s eye when he played for his country in their World Cup qualifying ties with England. He will train this week with Celtic’s squad before the Old Firm derby but would not be eligible to play against Rangers even if a deal went through on January 1.

“I’m delighted to be here and I hope everything will go well this week,” he said. “I want to play for Celtic and I believe I can make a difference. I’m strong in the air and two-footed. This is the chance of my life — and I want to sign for Celtic as quickly as possible.

“I know Celtic are one of the two biggest teams in Scotland and they always play in Europe. It is my dream to play for them. I am looking forward to meeting the players and hearing about the club’s plans for the future.

Verkhovtsov is rumoured to be attracting interest from clubs in Russia, Germany and Ukraine but said: “Celtic are my first choice.”

Mowbray also wants to acquire, Olivier Giroud, the striker from Tours, the French club, but has also stated an interest in Florin Costea, a 24-year-old Romania striker rated at £2 million by his club, Universitatea Craiova.

In addition, Lech Poznan, of Poland, have asked Celtic to make their bid for Semir Stilic, a long-time midfield target. Stilic is a Bosnian valued at £1.5 million.

“What we hope to do in January is add players to help the squad and to help the existing players and not necessarily replace them,” Mowbray said. “We have been working very hard in the last few months to identify footballers and areas of the team which need strengthening and that continues, but there are no guarantees that we will bring in anyone other than Ki.”

Source:timesonline.co.uk/

Belarusian Parliamentarians To Visit South Ossetia, Abkhazia

MINSK -- A group of Belarusian lawmakers will travel to Georgia and its breakaway regions of Abkhazia and South Ossetia to decide if they should have parliamentary discussions about the recognizing the regions as independent states, RFE/RL's Belarus Service reports.

Syarhey Matskevich, the chairman of the parliamentary International Affairs Commission, told journalists on November 5 that the group will meet with Georgian officials in Tbilisi and visit its breakaway regions from November 17-20. He said the parliamentary group will also hold talks on the issue with members of the Russian State Duma in Moscow.

Matskevich said that after the visit the commission will decide if it is necessary to hold a debate in parliament over the possible recognition of Abkhazia and South Ossetia as independent states. Russia recognized the two Georgian regions after a five-day war with Georgian forces in August 2008.

Nicaragua and Venezuela have in recent months also recognized Abkhazia and South Ossetia. Moscow has pressured Minsk to also recognize the regions as independent, though the European Union has sought to keep Belarus from taking such a move.

The EU is scheduled to discuss lifting sanctions against Belarus on November 16, one day before the Belarusian delegation travels to Abkhazia and South Ossetia.

Source:rferl.org