Putin says Russia resolved $700mn gas debt and other disputes with Belarus

Putin says Russia resolved $700mn gas debt and other disputes with Belarus
Vladimir Putin and Alexander Lukashenko thrashed out a raft of disputes at talks on April 3.
By bne IntelliNews April 3, 2017

Russia and Belarus will settle “issues in the oil and gas sphere” within ten days, President Vladimir Putin said on April 3 after talks with his Belarusian counterpart Alexander Lukashenko aimed at resolving a row over $700mn that Moscow says Minsk must pay for past natural gas supplies.

“No disputed issues remain to date,” Putin said after the consultations in the northern city of St Petersburg, adding that the two sides had agreed a roadmap for energy cooperation up to 2020.

Speaking at a joint news briefing after the talks, Lukashenko confirmed the deal and thanked Putin for helping refinance his country’s debts to Russia. “I very much regret that things happened as they did, but we must stick together and our peoples must see this, as we showed today,” he said, shaking hands at the podium with Putin.

The meeting followed months of friction between the neighbours – including the gas debt, tit-for-tat trade and export limitations, and border security – after Belarus in February granted a five-day visa-free entry for visitors from more than 80 countries. Russia, which has a largely uncontrolled shared border with its neighbour, regards the move as a threat to its own security.

After weeks of speculation that Belarus might even withdraw from post-Soviet integration structures, such as the Moscow-led Eurasian Economic Union (EEU), Putin went on to reaffirm the countries’ ties. “We will progress, strengthen ally relations within the framework of the Union State [of Russia and Belarus] and continue working on improvement of the regulatory base and development of the Eurasian Economic Union (EEU),” TASS quoted Putin as saying after talks that also addressed Minsk’s grievances at what it feels are discriminatory terms of its membership of the EEU.

Coming a day after the two countries celebrated their April 2 ‘Day of Unity’, the meeting of the presidents was overshadowed by the bombing of the St Petersburg metro, in which more than ten people died and dozens were injured.

Lukashenko said they discussed security as planned, not just because of the bombing, and also broader relations of their countries with neighbouring states, the EU and the US.

Regarding the future energy arrangements, Russian Deputy Prime Minister Arkady Dvorkovich, who handled the energy dispute in recent months, said the now-estimated $726mn Belarusian gas debt will be repaid to Russia’s Gazprom, which will in turn give an unspecified discount for gas supplies in 2018. Supplies of Russian oil and gas to Belarus will resume immediately after the debt is settled, Dvorkovich said.

He added that payment of the debt under the new deal will see the resumption by Russia of oil supplies in the previous volume. Reductions in supplies caused serious damage to the economy of Belarus since last summer, as the country relies on processed and re-exported Russian oil products for much of its income.

All the new agreements will be set until 2019 and then re-negotiated. Putin said Russia and Belarus are ready to develop rules for the common gas market by January 1, 2018.

“The aspiration was confirmed to create required fundamental rules and conditions by July 2019 for establishment of the common electricity market (exactly the general terms and rules) and readiness was confirmed to endeavour to develop joint rules for the common gas market by January 1, 2018 and finalise intergovernmental agreements on the common gas market within the Eurasian Economic Union framework by 2024,” Putin said.