Business news

11 May 2019

Belarus to announce amount of damage from tainted oil supplies after audits

MINSK, 11 May (BelTA) - Belarus will announce the amount of damage caused by the contamination of the Druzhba oil pipeline after the inspection of the oil refineries, Belarus President Alexander Lukashenko said as he talked to the media, BelTA has learned.

The head of state voiced his strong disapproval of the situation. “Due to slackness and lack of discipline in Russia (with the territory stretching thousands of kilometers) the big pipe has been polluted with poisonous oil which, as specialists say, eats away at the pipe, some 4-5mm per week,” he said.

With regard to the specific amount of damage, it is yet unknown. It is clear that it is huge. “I cannot talk about the exact amount today. It will finally be known once we take stock of what happened at the Polotsk oil refinery. We are calculating the damages now,” Aleksandr Lukashenko said. First it is necessary to assess the extent of damage to the equipment of the oil refineries. “We are assessing the damage now. Evey year we stop our oil refineries, one by one, for a month or a month and a half to clean them. Once the audits are done, we will know the extent of the damage,” the president said.

When calculating the damage several components will be taken into account. “This is a huge damage to the pipeline, the pipeline equipment (pumps at the stations and similar equipment) and the oil refineries. This is a huge damage to the country. We lost some profits, foreign exchange earnings, transit. We have lost huge amounts of money. This is hundreds of millions of dollars. Journalists often cite this amount. They are about right,” Alexander Lukashenko said.

Alexander Lukashenko recalled that on his instruction Belarus was planning to start repairing multiple sections of the Druzhba pipeline (approximately 10-12 troubled sections). However, the start of the repair works was delayed not to stop Russian oil transit. “Ad we see now there is no more time left. But when this poisonous oil hit the pipeline system I forbade to stop the pipeline not to inflict more damage on Russia,” the president stressed.

“We suspended all sorts of repairs so as not to aggravate the situation with oil supplies and transit through Belarus to Western Europe. Russia cannot completely replace this route. Some say they can deliver through Leningrad… They are welcome. But they will not be able to pump such amounts. How much will it cost? No one is saying that we will shut down the transit. We have our profits from transit too,” the head of state noted.

Aleksandr Lukashenko explained that the issue regarding the specific amount and the mechanism of compensation to Belarus for the damage over tainted oil supplies was not discussed with the Russian president. However, Vladimir Putin publicly admitted that the damage was done. “He realizes that the damage should be compensated for. He said that these are huge losses for Russia, damage to the image. Belarus is at the center of this damage. This problem hit us the worst. He publicly admitted that it is a huge damage. How much exactly? Experts will calculate it. I think the Russians should not challenge this. We are not going to sue the Russians. I think we will sort things out,” the head of state believes.

The theme of the contaminated oil supplies was raised during the meeting of Aleksandr Lukashenko and Vladimir Putin in Beijing. “We talked with Vladimir Putin in Beijing that those responsible must be held accountable. He took a very tough stance. He demand answers from the government, ministers and instructed the law enforcement agencies and even the FSB to look into what happened. I must say that Bortnikov [FSB director] with colleagues found those responsible very quickly and they must answer for what they have done,” Aleksandr Lukashenko said.

The president stressed that Belarus is not going to capitalize on this problem or to link the issue of compensation with the tax maneuver and its implications for the country. “This has nothing to do with the tax maneuver. The problem happened. Was it caused intentionally? Let them [in Russia] deal with this. Our refineries are receiving good-quality oil already. Part of the poisonous oil was pumped out into storage facilities. Russians will take it out or we will look for some other use of this oil. This story is winding up for Belarus and, as I understand it, still continues for Europe,” Aleksandr Lukashenko said.

On 19 April, Belneftekhim reported a massive decrease in the quality of the Russian oil mixture Urals flowing in transit into the main oil pipeline section operated by OAO Gomeltransneft Druzhba. The content of organochlorine compounds in oil pipeline exceeded the acceptable limits dozens of times. Both Belarusian oil refineries - Mozyr oil refinery and OAO Naftan – had to cut production and suffered losses. The oil meeting all quality standards reached the Belarusian border on 2 May and the line operations control station Mozyr on 4 May.

The official representative of the Russian Investigative Committee Svetlana Petrenko said that, according to the investigation, from 5 August to April 2018 2019 six suspects, among whom are Director General of OOO Nefteperevalka Svetlana Balaban, Deputy Director General of OOO Nefteperevalka Rustam Khusnutdinov, Director General of OOO Petroneft Aktiv Vladimir Zhogolev, Deputy Director of OOO Magistral Sergei Balandin, were part of the criminal network that stole oil worth at least RUB1 million. In March-April 2019, with the aim to hide the theft, several suspects injected the poor-quality oil not meeting the requirements into the pipeline system near the village of Nikolaevka in Volzhsky District.



Su	Mo	Tu	We	Th	Fr	Sa