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Russia, Belarus settle oil and gas dispute

April 13, 17:19 UTC+3

Belarus has paid down the full amount of its $726.2 mln debt to Gazprom

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© AP Photo/Sergei Grits

MOSCOW, April 13. /TASS/. Russia’s Deputy Prime Minister Arkady Dvorkovich said on Thursday Moscow and Minsk have fully resolved the oil and gas dispute.

"Belarus and Russia have signed four agreements, which fully resolve the issues in the oil and gas sector we’ve had over the past a year and a half related to Russian gas supplies to the Republic of Belarus and payment for those supplies," he said.

"The transfer (of Belarusian gas debt - TASS) has allowed us to shift to a new stage (of cooperation) in the oil and gas sector," he said.

Dvorkovich added that all necessary documents that will establish contract relations and remove all current and future claims regarding past supplies (2015 and 2016), as well as future supplies (through 2019), will be signed with the participation of Gazprom literally within an hour.

"Step-down coefficients will be applied to the contract price, which will lead prices to the pre-agreed level set in our agreements. I can say these prices are below $130 [per 1,000 cubic meters - TASS]," the official said. The price will be formed with a downward effect in 2018 and 2019, Dvorkovich said.

Russia and Belarus will seek to perform mutual settlements on oil and gas in rubles, he added.  "We believe this is a proper trend in general across all areas, with different countries, including the Republic of Belarus in particular," he said. "We certainly discussed pricing mechanisms but have not yet finalized them. We listed these variants in different protocols; among them is transfer to ruble prices, various linking options and other gas procurement mechanisms. Our gas market is experiencing transformation; the share of independent producers is growing. The role of the exchange is increasing gradually," Dvorkovich said.

The parties may reach an agreement on mutual settlements in rubles already this year, Dvorkovich added.

Belarus has paid down the full amount of its overdue debt to Gazprom for gas supplied in 2016-2017 of $726.2 mln, Russia’s gas producer reported Thursday. "The Belarusian party fully paid off its overdue debt of $726.2 million for the Russian gas supplied by Gazprom in 2016-2017," the report said.

"The protocol determines the pricing procedure for 2018-2019. According to the document, prices in the indicated period will be based on the formula linked to the gas price in the Yamal-Nenets Autonomous District. Gas deliveries in 2017 will be made on conditions of the effective contract," Gazprom said.

Single gas market

Belarusian Deputy Prime Minister Vladimir Semashko said Moscow and Minsk will develop the principles of a single gas market by the end of this year.

"We’ve made it clear that we have to develop a fundamental proposition on the formation and functioning of a single gas market by the end of this year," he said.

"We clearly indicated that the basic regulation on the procedure of establishment and functioning of the common gas market should be developed by the end of this year," Semashko said.

New agreements with Gazprom will be drawn up at the latest of July 1, 2019, following development of principles of the common gas market, he added.

Oil agreement

Russia and Belarus have signed protocol on parameters of oil, oil products export.

The agreement does not imply re-export of oil, Dvorkovich told reporters. "There will be no re-export," he said.

Earlier, the president of Belarus, Alexander Lukashenko said that by the end of the year Belarus will pay Russia $130 per 1,000 cubic meters of gas. According to him, the parties reached a compromise on oil and gas issues when they agreed to compensate high gas prices (according to the Belarusian party) through re-export of oil.

The two countries will seek to make mutual gas and oil settlements in rubles, he went on.

Joint investment projects

Moscow and Minsk are negotiating new investment projects, Dvorkovich said. 

"We also continue to cooperate on all remaining economic development issues, and propose interesting and mutually beneficial projects to each other. We’re taking off problematic issues in the agricultural sector and in many other areas. We expect to pursue high-tech cooperation," he said, adding that the two countries have a wide scope for partnership.

Vladimir Semashko said "we also continue to cooperate on all remaining economic development issues, and propose interesting and mutually beneficial projects to each other. We’re taking off problematic issues in the agricultural sector and in many other areas. We expect to pursue high-tech cooperation," he said, adding that the two countries have a wide scope for partnership.

Single electricity market

Oil and gas prices within the single electricity market of Russia and Belarus should be, if not equal, but as close to each other as possible, Deputy Prime Minister of Belarus Vladimir Semashko said.

"We must finally outline the trajectory. The task is to ensure that prices are as close to each other as possible, if not equal. To ensure that our electric power industry and our gas industries work in the same dimension, on the same scale," Semashko said.

Dvorkovich said "it has been agreed that the talks focused on the formation of a single market of gas and a single electricity market within the EAEU (Eurasian Economic Union) will be held whereas the work will start within weeks already."

"We hope to reach an agreement in this format. In case we find a single approach with our Belarusian friends without reaching an agreement with other colleagues, we do not rule out that we’ll make bilateral agreements allowing us to move to the common gas and electricity market," he said.

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