Moscow approves Minsk-Nur-Sultan oil deal

Kazakh Energy Minister Kanat Bozumbayev discussed with his Russian counterpart Alexander Novak transit of Kazakh oil through Russia to Belarus
Kazakh Energy Minister Kanat Bozumbayev discussed with his Russian counterpart Alexander Novak transit of Kazakh oil through Russia to Belarus

Kazakh Energy Minister Kanat Bozumbayev discussed with his Russian counterpart Alexander Novak transit of Kazakh oil through Russia to Belarus. Minsk will supply from 1 million to 3.5 million tonnes of Kazakh oil and petroleum products annually. An agreement on oil supplies was reached during Belarusian President Alexander Lukashenko's visit to Kazakhstan at the end of last week.

"Novak’s reaction to the plans of Nur-Sultan was not negative," Kanat Buzumbayev noted, describing it as "business". "We have very good relations with our Russian colleagues. We solve a lot of issues by phone. If these relations extend to relations with Belarus, we will make Russian-Belarusian oil and gas relations more optimistic," Bozumbayev said.

He emphasized that the talks between Nur-Sulatan and Minsk are of a "commercial nature" - raw materials can be supplied from the resources of companies with Production Sharing Agreements and the Tengizchevroil oil company. "Now Belneftekhim needs to hold commercial negotiations with our companies. We assume that these are mainly companies companies with Production Sharing Agreements and Tengizchevroil," the minister noted.

Earlier, experts in both Minsk and Nur-Sultan said that the main obstacle to the implementation of the oil contract is Russia's position, which is not ready to agree to pump Kazakh oil to Belarus. However, director of the Group of Risk Assessment (Almaty), political scientist Dosym Satpayev previously told Vestnik Kavkaza [Kazakh oil for Belarus] that Kazakhstan has counterarguments for Moscow: Russian oil and gas companies also need transit through Kazakhstan to China. Therefore, Moscow and Nur-Sultan will be able to agree on mutual concessions on transit.

Chairman of the Belneftekhim concern Andrei Rybakov, in turn, said: "Belarus and Kazakhstan have managed to agree the text of the intergovernmental agreement at the level of departments. Now it will be negotiated domestically, but we have already agreed that we will proceed directly to commercial negotiations with participation business entities without waiting for its signing". According to Rybakov, the talks will be held at the sites of the Belarusian concern and the Kazakh Ministry of Energy, which will oversee them. "We hope that in the near future we will find mutually acceptable forms of cooperation in the form of specific contracts and will implement plans for refining Kazakh oil at our refineries," the chairman of Belneftekhim added. However, he did not elaborate on the commercial component of the upcoming talks, explaining that "it needs silence." "We will see its results, which certainly should be mutually beneficial," Rybakov emphasized, noting that prices and volumes of supplies have not yet been determined. "All supply chains will be sorted out and calculated. Volumes will be agreed upon every year," the chairman of the concern added.

Belarus would like to accelerate the creation of a single energy market within the framework of the EEU. "Alexander Lukashenko, within the framework of a single oil and gas space, expected to get oil from Kazakhstan at favorable price. But the energy union has not been created, and it is clear that Lukashenko will have to work with Kazakhstan before its creation, which means that price offers will be uncomfortable for Belarus," Dosym Satpayev believes.

President of Belarus Alexander Lukashenko at the talks with his Kazakh counterpart Kassym-Zhomart Tokaev at the end of last week expressed the opinion that he will be able to agree with Russia on the issue of oil transportation from Kazakhstan. However, in addition to oil, Belarus was also interested in other Kazakhstan's areas. For example, Lukashenko invited Kazakhstan to buy shares in Belarsian "largest enterprises which are among the top companies in the world." He talked about the manufacturer of combine and forage harvesters Gomselmash. Lukashenko called the offer to sell shares of companies an act of greatest confidence in Kazakhstan. In addition, Belarusian campaigns have signed contracts worth $75 million in Kazakhstan. According to chairman of the Belarusian Chamber of Commerce and Industry Vladimir Ulakhovich, a total of 14 documents were signed, most of them in the field of engineering. In particular, BelAZ signed an agreement on joint manufacturing with AstanaBelazService K, Gomselmash and Agromashholding KZ signed an agreement on product sales; Bobruiskagromash Holding Company and AgroBusinessKazakhstan and Aksuat agreed on product supplies. Minsk Tractor Works signed four agreements on joint manufacturing with Kazakhstan Agro Innovation Corporation. Borisov Pharmaceutical Plant and Rogachev Milk Canning Plant also signed delivery contracts.

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