Russia's Payments to Belarus for Contaminated Oil Still Unresolved

MOSCOW (Reuters) - Russia and Belarus have yet to resolve differences over compensation for contaminated oil supplies last year, with the issue linked to a broader dispute between the ex-Soviet republics, two industry sources said on Friday.

(photo: Transneft)

Moscow and Minsk have been engaged in a number of rows, with the hottest one concerning oil prices and volumes. Both countries are also discussing gas prices and terms of the Russian oil supplies for the next year.

Russia has admitted responsibility for shipping millions of tonnes of oil, contaminated with chlorides, via the exporting Druzhba pipeline, including to Belarus, last year.

It has already paid some compensation to companies from Kazakhstan, as well as to French energy giant Total and Hungary's MOL. There has been no public announcement about the settlement with Belarus.

Belarus' energy company Belneftekhim has said it is eyeing over $61 million in compensation for the 563,000 tonnes of Russian contaminated oil, according to Interfax news agency.

That translates roughly to $15 per barrel, the highest possible level of compensation, promised by the Russian oil pipeline monopoly Transneft.

"The talks are part of broader relations, oil and gas supplies for next year are also there," a Russian industry source said.

Russian gas giant Gazprom said last week it had started talks with Belarus on gas supplies for 2021. "(The compensation) has been agreed long ago, they are binding their time. Now, the talks (on oil supplies) are beginning, that's another trump card," another source said.

Transneft and Belneftekhim have not responded to a request for comment.

Belarus' leader Alexander Lukashenko is in a precarious position following the Aug. 6 election, at which he claimed victory, challenged by widespread street protests and the opposition, who said the vote was rigged. Lukashenko denies wrongdoings.

Russian President Vladimir Putin has supported Lukashenko, bestowing a $1.5 billion loan on Belarus in September.

However, the deal on the contaminated oil compensation has so far proved to be elusive.

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