11 Jan 2018 15:46

Give-and-take refining at Belarusian refineries declines to 9% in 2017 on Russian tax maneuver

MINSK. Jan 11 (Interfax) - Give-and-take refining accounted for about 9% of overall refining at Belarusian plants in 2017, down from 13% in 2016, Belneftekhim deputy chairman Andrei Rybakov said.

"The share of give-and-take refining at Belarusian refineries declined due to the lower margins on oil refining after the so-called tax maneuver was carried out in Russia," Rybakov said in an interview with the BelTA state agency.

Commenting on the outlook for operations at Belarusian refineries are preparing for the day when Russia's crude oil export duty is reduced to zero, Rybakov said, that the Belarusian side is intensively preparing for the expected changes. "Given Russia's cancellation of the duties, in accordance with the formula for determining the price of oil for Belarus that is applied, the cost of Russian crude will increase by the same amount and be equal to the world price. The timetable for cancellation by the Russian side hasn't been determined yet. However, we are intensively preparing for the expected changes," he said.

In order to raise the efficiency of refinery operations given the market price conditions, modernization of the Naftan and the Mozyr Oil Refinery are being carried out. "Raising the product yield from crude, production of new products will make it possible for the refineries to earn supplementary profit and remain competitive on the world market," he said.

Belarusian refineries have been operating for several years now under tax maneuver conditions, which have seen the price of crude rise to the world level. "In 2017, for example, the cost of a tonne of Russian oil delivered to Belarusian refineries amounted to about 80% of the world price. It should be taken into account that in exporting product, the refineries pay a duty to the budget, negating the discounted price of the oil: the cost to the refineries is comparable to the cost of crude acquired on the world market," Rybakov said.

Belarusian refineries processed 18.120 million tonnes of crude oil in 2017, 2.6% less than in 2016. Product yield from crude was an estimated 73% at Naftan and 78% at Mozyr Oil Refinery.