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Author`s name Dmitry Sudakov

Belarus's Lukashenko To Buy Oil from Far Far Away

Alexander Lukashenko, the President of Belarus, who visited Venezuela on March 15-16, made an agreement with Hugo Chavez regarding the supply of oil to Belarus. This oil is to replace the Russian oil in part. There were some intriguing and even outrageous statements made, typical for both leaders.

"The contract for Venezuelan oil supplies to Belarus and agreement on cooperation in the energy sector will be signed in the near future. Our refineries will receive oil from Venezuela. We will reprocess it together and sell oil products in the European market,” Lukashenko said upon the completion of negotiation.

The Belarusian leader said the Belarusian-Venezuelan joint venture produces around one million tons of oil every year. “We will further develop oil production to meet the interests of both countries,” he said.

He added that Belarus will also help construct pipelines that will deliver gas to Venezuelan towns and villages. The Belarusian leader said three or four plants for manufacturing tractors, trucks and large haulage vehicles, as well as a major brick making plant will be built in Venezuela within the next year.

In his turn, Mr Chavez said that Belarus will receive 80,000 barrels of oil a day. “Venezuela and Belarus plan to sign an agreement on cooperation in the energy sector in the near future,” Chaves stressed.

Chavez also called his colleague to follow the path of socialism. He said that Lukashenko’s visit gave a push to the country under the global financial crisis. He added that the two countries knew how to move forward and continue to give momentum to the model of development in joint efforts based on socialism, independence and sovereignty in the multi-polar world. Chavez did not receive a response of his guest who is lately trying to build bridges to the capitalist West.

It is interesting why Lukashenko needs oil of Venezuela, located so far away from Belarus, when he has Russia with ample oil supplies nearby. Venezuelan black gold is hardly less expensive, especially considering that it would require delivery with tankers instead of pipelines. Pravda.ru talked to famous experts to learn more about it.

“This is a political issue,” said Alexander Fadeev with the Institute of CSI countries and Baltic States. “Mind you, the statements were made before the negotiations of Russian Prime Minister Vladimir Putin with his Belarus counterpart Sergey Sidorsky in Brest. One of the topics discussed was Russian oil supplies. Minsk would like to pay zero fees, and is trying to show that Russia is not the only one.

In all honesty, it is hard to imagine Chavez supplying oil for Lukashenko, considering difficulties with transportation, which will be reflected in its cost. Minsk does not need oil for internal consumption. The President said the oil will be reprocessed at refineries and sold to third parties. Considering the price, there will not be many customers willing to buy their oil products.

Ivan Rodionov, a professor of the High School of Economics, disagrees with the last statement.

“Intentions of Chavez and Lukashenko are easy to implement. Oil of different brands, including Venezuelan, is widely sold in Western countries, and transportation expenses are a part of the price. So Minks can buy it. Venezuelan oil can be delivered to Belarus via tankers through Rotterdam port with its oil reservoirs."

Technical implementation of the “oil agreement” between Belarus and Venezuela seems feasible. At the moment it is hard to say if it is a mutually beneficial economic solution or a political calculation.

Sergey Balmasov
Vadim Trukhachev
Pravda.Ru

Read the original in Russian  

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