Main page > Comments > Actual topics > Relations with Belarus get complicated

Relations with Belarus get complicated

Tension in Russian-Belarusian energy relations is rising. On June 21 Inter RAO literally at the last moment granted Minsk an extension on electrical energy debt repayment, thus canceling its plans to cut off electricity supplies. Russia started selling electrical energy to Belarus in February 2011; Minsk planned to import 3bn kW/h of Russian electrical energy this year.

The Russian side obviously did not want to repeat the previously made image mistakes related to tough measures against Belarus on the eve of the politically and historically inopportune date (June 22). But problems are likely to aggravate later. So far Lukashenko is not ready to agree to Moscow conditions of large-scale loans (privatization and sale of stakes in key enterprises at reasonable prices amid a deep and serious economic crisis in the republic).

Instead, Minsk is raising stakes in the game threatening to find other partners meaning not the EU (the relations with Europe worsened after political repressions in late 2010) but China that allegedly may get plots of land in the republic under long-term lease agreements in exchange for credits. The Belarusian side hopes to use the Chinese factor to press Moscow and Brussels. However, there is no guarantee that the PRC will allocate in full the loans Minsk request. Besides, the Belarusian leadership is running out of time – real incomes of the population are falling and the official exchange rate of the national currency does not correspond to the market estimations. Lukashenko’s measures on closing borders (the president even declared about his readiness to ban imports at all) are fraught with risks of additional growth in protest sentiments that are restrained by law enforcement bodies so far. However, there is an obvious and strong negative trend in the level of social support to the current political regime in Belarus.

By Stanislav Mitrakhovich, NESF leading expert

Bookmark and Share

Analytical series “The Fuel and Energy Complex of Russia”:

Gazprom on the background of external and internal challenges
Regulation of Oil and Gas Sector in 2019 and Prospects for 2020
Fiscal Policy on Oil and Gas Sector: Revised as Often as Wikipedia
The tax system in the oil and gas sector continues to undergo radical changes. The beginning of 2019 saw the introduction of a new tax regime: additional income tax. That experiment was supposed to start migration of the oil industry to an innovative principle of taxation: on profit, not revenue. It seemed that a new main road was found. In the same year, however, the Finance Ministry launched an overt offensive against AIT. The fear of loss of government revenue now is more powerful than the threat of causing oil production to collapse in the medium term because of a tax system that does not stimulate investment. The Finance Ministry would strongly prefer to speed up the tax manoeuvre completion that earns the state budget additional money. Oil and gas companies respond to this with individual lobbying, attempting to wangle special treatment for their projects.
Ukrainian Gas Hub: Climax at Hand
The “zero hour” comes in less than a month: the contracts for gas transit through Ukraine and for supplying Russian gas to the country terminate at 10 am on 1 January. Meanwhile, Gazprom and Naftogaz are very far from looking for a mutually acceptable solution. The entire European gas business is watching intently the negotiations between Russia and Ukraine. Everyone is waiting for a new “gas war”: the January 2009 events proved to be a serious test both to European consumers and to Gazprom as a supplier. Is there still a chance of agreement? If there is not, will Gazprom cope with its obligations to deliver gas to Europe? Is Russia bluffing as it assures that the new infrastructure and gas in underground storage facilities will enable it to get by without Ukrainian transit even as soon as this winter? What will happen to Ukraine itself at the beginning of 2020?
Digitisation and Its Implications for Oil and Gas: Myths and Possible Reality

All reports for: 2015 , 14 , 13 , 12 , 11 , 10 , 09 , 08 , 07

Rambler's Top100
About us | Products | Comments | Services | Books | Conferences | Our clients | Price list | Site map | Contacts
Consulting services, political risks assessment on the Fuel & Energy Industry, concern of pilitical and economic Elite within the Oil-and-Gas sector.
National Energy Security Fund © 2007