11 Dec 2019 19:03

Belneftekhim confirms indicative oil balance for 24 mln tonnes signed with Russia

MINSK. Dec 11 (Interfax) - The Belarusian State Concern for Oil and Chemistry or Belneftekhim has confirmed a document on the supply of 24 million of Russian crude oil in 2020 has been signed with the Russian Energy Ministry.

"An indicative balance for oil supplies from Russia to Belarus has been signed. The agreed balance is 24 million tonnes," Belneftekhim told Interfax.

A Belarusian-Russian inter-governmental agreement states the balance can be amended until November 15 of the year to which it applies. Belneftekhim did not say how much oil would be refined in Belarus in 2020. Belarus will refine 18 million tonnes in 2019, as in 2018.

The Russian Energy Ministry said at the beginning of December that the countries had signed an indicative balance for duty-free crude oil supplies in 2020 but it did not specify the volume.

A source with knowledge of the situation told Interfax earlier that the balance would be for 24 million tonnes, as in 2019. Another source said 23.5 million tonnes would be supplied by pipeline and 500,000 tonnes by rail.

Deputy Russian Prime Minister Dmitry Kozak, responsible in the cabinet for fuel and energy, said at the beginning of December that the indicative balance for 2020 would not include so-called "recustoming."

Despite the nominal volume of 24 million tonnes, Minsk is in fact buying 18 million tonnes this year, with the remaining 6 million being recustomed; that is, export duties on this volume are credited to the Belarusian budget. It is estimated that recustoming subsidies will total about $2 billion per year. In 2017, the sides adopted this procedure as a mechanism for subsidizing the price of gas in 2018-19, which was $127 and $129 per thousand cubic meters, respectively.

Minsk has repeatedly said that it links the possibility of deepening integration with Russia through the Union State with the solution of their most difficult economic issues: the terms for deliveries of gas and oil and compensation for losses from Russia's tax maneuver.