RBK daily: Consolidation of oil assets does not exclude their selling to private investors :: Charter'97 :: News

Privatization of the Belarusian economy announced not long ago will not touch upon the oil industry. The state oil company is to be established by July 2007. According to the official sources, this was declared by Deputy Prime Minister Uladzimir Syamashka at the meeting of the presidium of the Council of Ministers. According to him, the work on establishing oil trading company with participation of Belarusian oil refineries is underway, the RBK daily writes.

23 January at the meeting in Navapolatsk Alyaksandr Lukashenka ordered to establish a state structure similar to the Belarusian potassium company (BPC) for dealing with oil purchasing and oil-products selling. As Uladzimir Syamashka reported yesterday, the ”Belnaftahim” concern which was engaged in establishing the BPC have started work on establishing the oil trading company. According to him, financing of the project is now being discussed with the banks.

It is to be mentioned, that the BPC as the exclusive deliverer of potash fertilizers manufactured by Belaruskali and Russian Uralkali to foreign markets was created in April 2005.At present the BPC controls around a third of the total potassium deliveries to the world market.

According to Nadezhda Kazakova from the MDM-Bank a newly created oil- trading company will be given access to cheap credits secured by export proceeds. As far as the analysts consider, the value of consolidated company in economic terms will be higher than the value of separate sales companies.

It is envisaged that two oil refineries (Mozir refinery and Naftan), the Belarusian Oil Trading House and the Belarusnafta will establish a joint statutory fund and register this enterprise in Western Europe. According to the Belnaftahim, importance of the company’s registration as a non-resident is grounded by additional economic effect due to decreasing of the tax component in the company’s output.

As far as the Belarusian state oil company is concerned, the Belarusian government has already planned its establishment at the beginning of the year but until now there is now fixed data either on its parameters or on the date of its opening. This information was received by the RBK daily from the source close to the Belarusian government .The only reason for creation of such company is to find an off-budget source of state enterprises financing. Now the profit of the Belarusian oil and oil- trading companies has fallen down: the most profitable Belarusian market consumes only 20-30 % of refined products. Thus, new sources of financing and consolidation of financial inflows have become the burning issues of the day.

Consolidation of oil assets in a single state company, however, does not exclude their further selling to private investors. The analysts do not exclude that creation of new structures is connected with envisaged privatization of state enterprises in Belarus, among these are oil refineries and chemical enterprises. According to them, in future Minsk may dare to place its shares at one of the world stock markets, leaving the major stock to itself.