Kazakh oil processing in Belarus is not feasible before 2015
Cooperation between Belarus and Kazakhstan in the oil sphere has been discussed before. The parties expect to resolve the issue of access to the pipe after creating the CES in 2015. However, even if the issue of oil transit via Russia is resolved chances for long-term cooperation are slim.
On August 23rd, Ambassador Extraordinary and Plenipotentiary of Kazakhstan to Belarus Yergali Bulegenov held a press conference in Minsk.
The main reason for Kazakhstan’s accession to the Customs Union was to get access to transit pipelines through Russia to export its energy resources. Belarus does not hide the fact that one of the main reasons behind its joining the Customs Union was to have access to the Russian energy resources at Russian domestic prices. Therefore Belarus is equally interested in processing Kazakhstani oil.
Belarus and Kazakhstan already have similar experience. In 2010, during the conflict with Russia about Russian oil supply, in parallel with the oil supply from Venezuela, Kazakh gas and fuel deliveries were organized for further procession at Belarusian refineries. Annual transit of Kazakh oil through Belarus to consumers in the EU is about 4-6 million tons.
The main obstacles for further cooperation are the lack of guarantees for a steady supply of the necessary amount of Kazakh oil and incomplete contractual basis for further cooperation between the two countries.
Oil supplies to Belarus are adjusted annually. The bulk of oil supply is carried out via Transneft company. In 2012 the supply volume was pre-decided, as well as the share of tolling processing at Belarusian refineries for Russian companies. Belarusian refinery capacity has reached 100% already and there is no possibility for additional processing. Potential processing of Kazakh oil on commission conditions raise the issue of Russian oil deliveries for domestic needs. Kazakhstan is unlikely to agree on terms similar to the Russian ones. It is interested in guaranteed transit and not willing to lose money on providing preferential prices for Belarus.
Cooperation between Belarus and Kazakhstan on Kazakh oil processing lasted only as long as lasted the oil supply conflict between Belarus and Russia. And it would have lasted, if the economy of oil processing was more profitable than similar scheme with Russia. Curtailment of Kazakh supply means this cooperation was unprofitable for Belarus.
The issue of duties payment has not been resolved either. Belarus and Russia have unified duties on oil and oil products export. In Kazakhstan different duties are applied. Until this issue is resolved, there could be confusions regarding duty payments to the budget. Regulatory framework is not likely to be ready before 2015.
Therefore the Kazakh oil procession project is rather a PR campaign meant for Russian companies, than a real cooperation opportunity. Belarus needs secure oil supplies for processing. Today such guarantees can be provided by Russia only.
President Lukashenka continues to rotate staff and rejuvenate heads of departments and universities following new appointments in regional administrations. Apparently, new Information Minister Karliukevich could somewhat relax the state policy towards the independent media and introduce technological solutions for retaining control over Belarus’ information space. New rectors could strengthen the trend for soft Belarusization in the regions and tighten the disciplinary and ideological control over the student movement in the capital.
President Lukashenka has appointed new ministers of culture and information, the new rector of the Belarusian State University and heads of three universities, assistants in the Minsk and Vitebsk regions.
The new Information Minister Karliukevich is likely to avoid controversial initiatives similar to those former Minister Ananich was famous for, however, certainly within his capacities. Nevertheless, the appointment of Belarusian-speaking writer Karliukevich could be regarded as the state’s cautious attempt to relax environment in the media field and ensure the sovereignty of national media.
The Belarusian leadership has consolidated the trend for mild Belarusization by appointing a young historian and a ‘reasonable nationalist’, Duk as the rector at the Kuleshov State University in Mogilev. Meanwhile, while choosing the head of the Belarusian State University, the president apparently had in mind the strengthening of the ideological loyalty among the teaching staff and students at the main university in order to keep the youth movement at bay. Previously, Korol was the rector of the Kupala State University in Grodno, where he held purges among the disloyal teaching staff.
The trend for the renewal of mid-ranking executives and their rejuvenation has confirmed. The age of the Culture Minister and three new rectors varies from 39 to 44 years old.