Lukashenka has to sell state property :: Charter'97 :: News

The issue of possible privatization of oil refineries has been put under discussion in Belarus after a several years’ break when this subject was not touched upon. The resumption of the discussion itself supposes probable changes to take place in Minsk where no discussion of strategic enterprises selling had ever been admitted before. “The negotiations on privatization of oil refineries with supposed participation of the Russian business is assumed to take place in the coming months”, head of the Belarusian analytical center “Strategia” Leanid Zaiika told in his interview with the “Vremya Novostey” newspaper yesterday.

Belarusian economist Tatstsiana Manyanok also considers that the privatization issue has matured though she doubts the government’s decisiveness to take the step forward. Belarus oil refineries and petrochemical enterprises, particularly Mozir and Navapolatsk oil refineries, Naftan as well as Azot, Polimir and several others, are very attractive for the Russian business.

At present the Russian capital participates only in Mozir oil refinery, 43.7% of its shares belonging to Slavneft. Naftan is a joint-stock company with 100% state capital. The depth of oil refining at both Belarusian oil refineries is 70- 72 %. The enterprises have been recently upgraded. But to make their output competitive at the European market it is necessary to make further investments into their reconstruction.

And as far as the investment resources are concerned Belarusian enterprises are likely to face problems because since 1 January Russia has imposed duties on crude oil export to Belarus and the Belarusian and Russian export duties on oil products have been unified. It reduced the attractiveness of the Belarusian oil refining for Russian companies. The volume of Russian oil deliveries has decreased by 23.4% over January – March period as compared to indicators of the earlier months.

The problem of the oil refineries capacity has not been decided, yet. Thus, President Alyaksandr Lukashenka’s declaration on a supposed construction of the third oil refinery in Belarus with participation of the United Arab Emirates sounded unexpectedly in this context. If Belarusians start cooperating with Arab countries in this sphere it will negatively affect Russia’s interests. Anyway, Lukashenka is starting using this issue in the dialogues with Moscow. ”Now we are having more options then previously”, he said. President has also been irritated by the fact that deliveries of oil on condition of their exchange for output produced from that oil volume decreased in spring. The figures of this decrease are unknown. But a couple of days ago Belarusian deputy Prime Minister Uladzimir Syamashka promised to solve the problem in the following way: “ Even if there are no deliverers we shall preserve our strategy: maximum oil refining at our own oil refineries”. In other words, Minsk intends to additionally procure oil for providing full capacity of its oil refineries. It is still unclear how much oil is to be bought and where. Oil deliveries from Iran, Azerbaijan and even Venezuela have been negotiated but that oil prices are to be higher than the Russian oil prices.

Ambassador of Russia to Belarus Aleksandr Surikov is sure that the problem may be decided through privatization of Belarusian oil refineries with participation of the Russian oil- mining companies. “It will be good for the oil owners to become co-owners of the oil refining. It will solve the problem of providing their production capacity”.

The Belarusian party dwells on the possibility of Belarusian oil refineries’ privatization with a good deal of uncertainty. “We welcome all potential investors who are ready for our enterprises’ privatization at their real market cost ", Belarusian Prime Minister Syargey Sidorsky declared when answering the “VN” newspaper questions. The Prime Minister told that the enterprises were annually revaluated, their value increasing, and they would not be sold “for next to nothing”.

In 2003 Belarus pushed by Russia attempted to privatize its oil refineries and petrochemical enterprises but nobody applied for the announced tenders. The potential buyers were dissatisfied with high prices of the non-majority stocks and the imposed obligations in social sphere. Then the 43% stocks of Naftan, Polimir, Azot and the Grodno Khimvolokno were offered. The Naftan stocks cost USD 476 million, Polimir- USD 311 million, Azot- USD 296 million, and Khimvolokno- USD 71 million.

“Today the State is not aimed at selling its enterprises. But they should be offered for sale until they are liquid. If they are not timely financed and reconstructed, their liquidity may face problems, Tatstsiana Manyanok says to the “VN” newspaper. And according to Leanid Zaiika, Minsk will have to resort to privatization “ the Kremlin has pulled our leg by its decision to cancel the oil subsidies. It means that soon Belarus is to start selling its property”.