President of Belarus Alexander Lukashenko will hold talks with his Russian counterpart Vladimir Putin today in Krasnaya Polyana, Sochi.
President of Belarus Alexander Lukashenko will hold talks with his Russian counterpart Vladimir Putin today in Krasnaya Polyana, Sochi. The head of the Belarusian state arrived in Sochi yesterday.
The press service of the Belarusian leader stated that the heads of state will discuss a wide range of issues on the agenda of Belarusian-Russian cooperation. The Kremlin press service, in turn, reports that the presidents will discuss current issues of bilateral cooperation, including in the context of integration processes within the framework of the Union State.
It should be noted that Presidents Alexander Lukashenko and Vladimir Putin meet quite often, both in a bilateral format and at integration platforms, and call each other when necessary to discuss current issues. Recently, media interest in the talks between the heads of state has particularly increased due to emerging problems in cooperation.
Throughout the past year, the governments of Belarus and Russia have been developing an integration package – three dozen roadmaps in various areas. However, as of the beginning of 2020, important practical issues for Belarus remained unresolved, including those lying outside the scope of integration. The main knot of disputes is related to pricing and the supply of Russian hydrocarbon raw materials. The factor of the tax manoeuvre in Russia's oil industry is also present here, due to which Belarus lost approximately around $330 million in 2019 alone, including budget losses of $130 million and losses for oil refineries of almost $200 million.
Furthermore, the issue of compensation by the Russian side for the contaminated oil supplied through the "Druzhba" pipeline in April has not yet been finally settled. Both Belarusian oil refineries – Mozyr Oil Refinery and Naftan OJSC – were forced to reduce their capacity utilisation and incurred losses, and the pipeline system also suffered damage.
"This has been happening regularly for 13 years now"
As previously reported, on the eve of his visit to Russia, Alexander Lukashenko convened a meeting to discuss ensuring the effective operation of the country's fuel and energy complex. "We have gathered to discuss a set of measures for fulfilling forecast indicators and, frankly, for overcoming the negative trends that have emerged in our economy due to recent global events, and primarily in our relations with Russia," stated Alexander Lukashenko. "These are not just narrow issues. Everyone is talking about them – such as oil and gas supplies, and the trade wars, which, unfortunately, have become commonplace recently."
Alexander Lukashenko noted that disagreements on energy issues with Russia, the closest partner, have been occurring regularly for 13 years, despite mutual obligations. "Although firm guarantees were given to us upon their signing. For example, this year Russia committed at the intergovernmental level to supply Belarus with 24 million tonnes of oil – 2 million each month. In January, 500,000 tonnes were supplied – one quarter," said the head of state.
In January, Belarus was working on oil supplies with the Russian group of companies "Safmar" at a price without a premium, while other Russian suppliers demanded an additional premium on top of the oil price. "And that's $15-16 per tonne. Multiply that by 24 million tonnes. That's a considerable amount of money," Alexander Lukashenko explained in one of his recent speeches.
The Belarusian side also has claims regarding Russian gas supplies. The President has repeatedly reminded recently that when "Beltransgaz" was sold, there was an agreement and a promise to align the pricing conditions for Belarus with those of Russia within the next few years. At the same time, the Head of State emphasized that the issue here is not the price, but equal competitive conditions.
During the previous multi-hour negotiations with Vladimir Putin on December 7 in Sochi, Alexander Lukashenko stated: "Equal conditions – nothing more is needed. We are not asking for, as some say, cheap gas, cheap oil. We are ready to buy gas at $200 and oil not at $63 per barrel."
Incidentally, the price of Russian gas for Belarus in 2019 was $127 per 1 thousand cubic meters, and the parties were supposed to agree on a new contract and price back in the summer of last year. However, this was only managed on the eve of the New Year, and only for January-February at the previous year's level, although the Belarusian side had counted on a phased reduction.
"Alternative Supplies Are Not a Bluff"
The situation with energy resource supplies has forced Belarus to seek alternative sources. Alexander Lukashenko gave a direct instruction to the government in this regard. Various supply options are being considered, including pipeline and rail transport. The issue has already been publicly discussed with high-ranking officials from neighbouring transit countries – Prime Minister of Latvia Krišjānis Kariņš and Minister of Foreign Affairs of Lithuania Linas Linkevičius during their recent visits to Belarus.
Active negotiations are also underway with potential suppliers. For example, with Kazakhstan. The President of Belarus emphasised that work on alternative oil supplies to Russia is not a bluff, and spoke about possible routes. One of them is through Baltic ports, and a batch of Norwegian oil has already been purchased this way. Another Baltic route is from Gdansk via one of the branches of the Druzhba oil pipeline, which will need to be switched to reverse mode for this purpose. "I told Putin directly: in the first stage, if we reach an agreement with the Poles, we will supply in reverse through one of the three pipes," the head of state noted at the end of January.
The third direction, and it has been tested before, is supplies through Ukraine from the Black Sea.
"And the fourth is Russia. We are not abandoning this oil. But this will lead to diversification of supplies. That is, we will not receive oil from one country, from a monopoly," the President stated.
Earlier, it was also reported about the readiness of a number of major players in the oil market to supply the relevant raw materials to Belarus. Among them are partners in the Middle East and even the USA. "Our energy producers are ready to supply you with the necessary oil 100% at competitive prices. We are the largest energy producers in the world. And all you need to do is contact us," said US Secretary of State Michael Pompeo on February 1 after a meeting in Minsk with Alexander Lukashenko.
In general, the President sets the task to strive to purchase 30-40% of the required oil volumes from Russia and to import approximately one-third from the Baltics and via Ukraine.
"A Moment of Truth Has Arrived"
Information about the upcoming regular negotiations with the leadership of Russia became known on February 4. The President of Belarus shared this with journalists during a visit to an enterprise in Dobrush. "As I understand it, and I will tell him this openly, a certain moment of truth has arrived. We have established these good relations (between Belarus and Russia. - BELTA note). We were the architects of these relations, so why should we break them at the end of our political careers. We are not eternal. What will we leave behind – that is the question," the Belarusian leader stated.
He stressed that Belarus desires the warmest, kindest, and most friendly relations with the fraternal people of Russia, but pointed to a number of unresolved issues in interstate cooperation. Furthermore, Alexander Lukashenko drew attention to a significant imbalance in Belarusian-Russian trade: "Today, we have a negative balance in foreign trade with Russia of $9 billion. That is, they sell us $9 billion more than they buy. So, who is feeding whom? Specialists understand this."
Overall, the head of state once again called for constructive cooperation. "We need to improve relations. We need to pass on to the new generation what we have accomplished (in previous years in developing bilateral relations with Russia. - BELTA note), and in a dignified manner," he summarised.