Putin and Lukashenko reach agreement on oil and gas prices

Belarus and Russia have found ways to compensate for Belarus’s expenses that were caused by a Russian tax maneuver in the oil sector, said Belarusian Ambassador to Russia Vladimir Semashko on Sunday after a meeting between Vladimir Putin and Alexander Lukashenko in Sochi.

According to Semashko, the leaders have found ways to compensate part of Belarus’s losses arising from the tax maneuver – roughly $400 million per year, the amount that Minsk earned through favorable oil prices.

Semashko said that the compensation will not be for the full amount. Nevertheless, it will guarantee that the Belarusian oil refineries get through 2020 “painlessly”, he noted.

The matter of full compensation can be resolved after January 1, 2022, since the two countries’ tax legislation should be unified, the ambassador said. “The goal has been set to resolve the matters of unifying taxation over the course of 2020-2021 and start implementing it as of January 1, 2022, as agreed,” said Semashko.

Russia and Belarus’s positions on oil and gas matters have become much closer, confirmed Russian Minister of Economic Development Maxim Oreshkin.

“On agriculture, on communications, on customs, on the regulation of the oil market, very serious progress has been made,” he said. “Even on the matter of oil and gas, the positions have been brought seriously closer.”

Putin and Lukashenko have agreed to meet again on December 20. “As of Monday, on an expert level we are starting to work in detail on all the directives we received today, so that all of this can be formulated and added to the roadmaps,” said Oreshkin. “Then we will report to the prime minister, and he will report to the president.”

One issue which remained unresolved was the matter of Belarus’s compensation for the incident with the “dirty” oil, which resulted in two months of downtime for the Druzhba pipeline at the start of summer.

“The amount in question is considerable – roughly $70 million,” Semashko told the BelTA news agency.

“It seemed to me that December 6 found a solution to this matter, even the prime minister of Russia was in agreement that, just like, for example, the Hungarian company MOL settled with Transneft: there would be $15 of compensation for each barrel of dirty oil,” said Semashko. “We would have liked that. But on Saturday everything somehow sounded different.”

As Semashko noted, next week the chairman of the Belarusian state oil and chemicals concern Belneftekhim will travel to Moscow “with extremely rigorous legal documents to put forward these claims”.

  Putin, Lukashenko, Russia, Belarus