Oil may day in Belarus
In the beginning of May Belarus had two “oil” news which, as www.Euramost.org see it, are strangely connected. The first news came from the main supplier of energy resources to our country – Russia, and the other one came from the strategic partner of Belarus in this area – Venezuela. And to be exact, it came from Ukraine, where the first slug of “Belarusian” oil came.
The first news is unpleasant: form May 1 Russia increased crude export duty (CED) up to $284 for a ton. It is stated in the government’s decree. The amount of increase is a bit higher than $15: in April it was $268,9 for a ton of wild oil. Simultaneously the export duties on light oil are increasing from $193,5 to $203,7 for a ton, and on dark-oil products – from $104,2 to $109,7 for a ton. The second news is that on May 2 in the morning the first 57 carloads of oil from Venezuela arrived to Mozyr plant. Gross weight of oil is 4,4 thousands of tons. But let us go back to the prehistory of the question. The first 80 thousands of tons of Venezuela oil arrived to Odessa port in the night of April 24-25. Hardly got the news about this event to the President’s Administration, Lukashenko was already worried about how not to let all the realized profit from the processed foreign “black gold” to get to Russian stockholders of this plant. On Tuesday, April 27 the president gave order to keep all the profit from the processing of Venezuela oil in Belarus. “If you let a single ruble to go to investors abroad, you will have to blame only yourself, - said Aleksandr Lukashenko addressing the director general of Mozyr Oil Processing Plant (OPP) Anatoly Kupriyanov, when visiting Petrykov district. – All money till the last drop must stay in Belarus”. According to his words, Russian stockholders didn’t need to process oil and they didn’t need profit. True, 42,5% of stock of Mozyr OPP are owned by the Russian oil and gas campaign “Slavneft” which active assets in its turn are owned in equal parts by “Gaspromneft” and “TNK-BP”. “Slavneft” don’t comment this announcement of the Belarusian president about his vision of separation of profits between stockholders of the plant, so far. Thought, in any case Russian stockholders of MOPP can’t pretend to the profit from selling of oil products from Venezuela oil, which Lukasheno is supposedly very concerned about. The fact is that the owner of Venezuela oil is state Belarusian oil campaign, writes BelaPAN. It will get produced oil products for its raw material and the profit from their realization for export. The profit (it there will be any profit, of course, taking into account cross-subsidization in the field) Mozyr OPP will get only from the service of processing. As far as we know, the minimal price of processing costs $50 for a ton at Mozyr Oil Processing Plant. So the processing of 80 tons of Venezuela oil will greatly improve the economic state of the plant. The profit of Belarusian oil campaign is also important. But the main question is still remaining without an answer: the cost effectiveness of such supplies from Venezuela to Belarus. The distance from Venezuela to Odessa is approximately 13,6 thousands km and the oil tanker freight rate is $0,34 for 100 tons per km quoting TUT.BY. In this case delivery of 80 thousand tons of oil will cost about $3,7 mn. Igor Yushkov, the expert of National Energy Security Fund (NESF) also added costs of transit through Turkish channels which is on the average $30 per ton of oil. In such a way for a transportation of a ton of oil from Venezuela to Odessa one should pay about $76,24. But it’s not all the expenses: transportation of oil by railway is a well-known expensive way. Supposedly, 1330 tank cisterns which will compose about 20-25 waggonages will be needed for 80 thousand tons of oil. The cost of transportation of 20 railway waggonages to Mozyr OPP can cost $5,2 mn at the cost of$65 for a ton. Though, these rates will be supposedly lessened for Belarus to about $36 for a ton. So the price of Venezuela oil brought bya tanker to Odessa and from there by the railway to Mozyr OPP will cost for Belarus approximately $737 per ton on the conditions that original price of Venezuela oil is $85 per barrel. If further this oil is transported from Odessa to Mozyr OPP through a pipeline “Odessa – Brody”, the cost of a ton of oil will be reduced to $682. Let’s turn to the east again. The cost of Russian oil for Belarus is $523 per ton of duty-free oil (counting $70 for a barrel) and $790,6 for a ton of oil with 100% duty. Let’s compare the numbers: $523 per ton of duty-free Russian oil and $737 per ton of oil from Venezuela. Obviously, the variance in not in favor of Venezuela oil. But the question is if we compare the price of Venezuela oil $737 and $790 per ton of Russian oil with 100% duty. It’s the other thing. And the officials know what numbers they have to compare to fit economics to politics. Dmitry KRAMCHUK