Oil Companies to Pay for Russia-Belarus Agreement 14:32, 30/01/2007
Belarus began working with Russian oil companies according to new tariffs yesterday. Instead of forward contracts with fixing prices on the date of oil refining, the parties switched to average spot prices for Poland’s ports minus transport expenditures. Consequently, the prices of supplying oil to Belarus will remain at the last year’s level of $240 per metric ton, but already including the export duty. Experts estimate that these contracts will not seize being profitable for Russian oil companies, even with the introduction of export duties since January 1.
Russian oil companies Rosneft, Russneft, LUKOIL, and TNK-BP signed a framework agreement with Belarusian state holding Belneftehim. Oil prices will now be established by a joint commission of Belneftehim representatives and Russian oil companies on the base of the average spot price of ARA (Amsterdam—Rotterdam—Antwerpen) applied to Poland’s ports minus transport expenditures (including harbor dues and tanker freight).
Surgutneftegaz and Mozyrsky oil refinery yesterday signed their first agreement based on new formula of price formation. Transfer prices in February will be by $15-20 per metric tons lower than in December. Contract price of oil for Belarus was $230 per metric ton in December. Export duty of $53 per ton was imposed since January 1, 2007. Mozyrsky oil refinery was buying oil at $275 per ton in January.
Oil companies are in fact deprived of their excess profits. Indeed, the price for supplying Russian oil to Poland without taking into account export duties ($180 per ton) is $172 per ton. The companies will be selling oil in Belarus at $187 per ton averagely, even with the new price-formation formula.
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