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17 May 2019, 16:45

Belarus to insist on compensations for direct, indirect loses caused by tainted Russian oil

SVETLOGORSK, 17 May (BelTA) – Belarus will insist on compensations for the direct and indirect losses caused by poor-quality oil from Russia, BelTA learned from Deputy Prime Minister of Belarus Igor Lyashenko on 17 May.

The official said: “We've talked to [Russian] colleagues. Two kinds of compensations are involved: direct losses of enterprises and indirect losses. The direct losses are simple to understand – broken equipment. Competent groups are working on it. The Russian side has assured us that Belarus will get compensations for documented expenses. Naturally, we've raised the issue of indirect losses, too.”

Igor Lyashenko clarified that indirect losses are seen as the inability to earn money from oil transit and missed earnings from one's own export. “We have yet to discuss these matters with the Russian side. Russian Deputy Prime Minister Dmitry Kozak has given instructions to set up a working group made up of economists, production engineers, who will convert these phrases into sums,” he explained.

After that, Igor Lyashenko continued, these matters will be reviewed by deputy prime ministers or someone higher than that.

Asked to specify the size of compensations for poor-quality Russian oil, Igor Lyashenko stressed it is too early to talk about the final sum. In his words, the cost of Mozyr Oil Refinery equipment broken by polluted oil is close to the equivalent of $30 million. Due to peculiarities of the chemical processes caused by chlorine inside the equipment, walls of pipes are getting thinner and more cases of damaged catalysts are going to be recorded. More complete information will become available during a major overhaul of the oil refinery, which is supposed to take place in August.

“We saw a similar situation in Russia in the 2000s. As a rule, a refinery can spend up to one year suffering from consequences of equipment broken by unwanted chlorine,” Igor Lyashenko added.

BelTA reported earlier that on 19 April Belneftekhim registered a massive decrease in the quality of the Russian oil mixture Urals flowing in transit into the main oil pipeline section operated by OAO Polotsktransneft Druzhba. The concentration of chlororganic compounds in oil exceeded standard thresholds dozens of times over. Both Belarusian oil refineries – OAO Naftan and Mozyr Oil Refinery – have been forced to reduce their workload and have experienced financial losses. The workload of OAO Naftan is still reduced. Lost earnings from selling oil products due to the situation around substandard Russian oil in April were previously estimated at about $100 million. The total damage from substandard oil has yet to be calculated.

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