Is everything put up for sale?

Since February Belarus plans to sell all the volume of oil produced in the country. This decision is connected with the necessity for Belneftekhim to fulfill the balance of foreign trade which had been proposed by the government.

“To create conditions for exporting a maximum volume of oil produced in the country the government of Belarus extended previous volume of transfers from budget to oil refiners, which stimulates work of Russian companies toll enterprises at the Belarusian market,” Prime-Tass agency has been informed by state bodies.

In 2007 Belarus produced 1,760 mln tons of oil. Belarusian oil refineries received, according to preliminary estimates, about 700 thousand tons of oil. Last year the Industrial association Belorusneft had to stop for several months export of Belarusian oil. It was connected with refusal of Russian toll enterprises to deliver oil to Belarus and as a result, with absence of finances for buying growing volume of oil by plants.

Only after incentives for inflow of oil from toll enterprises Belarusian side could resume oil export. In September 2007 Naftan didn’t receive Belarusian oil, and only 456 tons were delivered to Mozyr oil refinery.

Belorusneft planned to export 1.3 mln tons of oil in 2007. This export volume had been approved in the framework of the common balance of fuel and energy resources of the so-called “union state”. In 2008 the Industrial association plans to produce 1.7 mln tons of oil.

Since august 2007 Belarusian government introduced increased public subsidies for oil suppliers, 130% of the level of Russian special duty on oil delivered to Belarus. The public subsidy for oil refiners of pipeline oil is 110%.

The government set a task for Belneftekhim to achieve positive balance of 4 billion dollars according to the results of 2007. As initially estimated, positive balance was about 3 billion dollars by the end of the year 2007. The task for the concern to achieve positive balance in 2008 is to be revised yet.