Lukashenka’s oil kings started to make money in real estate

Oil refining ceases to be a goldmine of the Belarusian economy.

Triple and Univest-M company groups, against which the EU has imposed economic restrictions, are united primarily by their many-year participation in oil refining, Nasha Niva writes.

Who else works in the oil market, and why new private companies do not enter this market?

Closed quota

In the beginning and middle of 2000-ies when the volumes of Russian oil, which was imported to Belarus reached giant amount, there were dozens of companies which wanted to process oil. It was more profitable for Russian corporations to work in our country than in their home country because of peculiarities of the legislation. As a result, in 2007-2010 exports of oil and oil products exceeded $30 billion.

Alyaksandr Lukashenka personally issues permission for work. Back in 2003 he ordered to create a governmental commission headed by Anatoly Tozik, which was to accept applications from companies which wanted to import and refine oil. Some of the participants of the commission, who left the government, became advisors in Russian companies then… However, the final decision, which quota would be given to a company, belonged to Lukashenka.

New Rules

Just a few years ago there were about 20 operators in the country, but now their number is decreasing. “Oil refining was profitable a few years ago. But the situation has changed. Work for the home market does not bring money now,” explains Tatsyana Manenok, an expert in the sphere of energetics. Over 2010 Belarus had adverse balance in oil and oil products trade – minus $1.5 billion. In 2011 the situation was even worse, considering the return of duties to the budget of Russia, the adverse balance was minus $2 billion.”

“I do not think that oil refining was the main source of income for Yury Chizh. His business is versatile, which helps to overcome crisis situations. Triple reached success also due to certain closeness to the government, and due to effective work of managers,” believes Tatsyana Manenok. Moreover, as said by her, recently Triple could be not engaged in oil refining. The same is with Univest-M of Anatoly Ternavsky, the company which propelled into success due to oil, now makes money on real estate.

Evenly Divided Market

Instead of Belarusian officials whose share in the market of oil products has dropped to minimum, Russian corporations have come to the front. According to laws and regulations, only resident companies can refine oil, so Russians are working through their local representation offices. 50% of quotas belong to Lukoil, TNK and other companies which import their feedstock to oil refineries of Belarus. The other half is received by four state-owned companies. They are Belorusskaya neftyanaya kompaniya (Belarusian oil company), Belorusneft, Naftan and Mozyr oil refinery.