Venezuela’s Oil May Help Belarus Make Friends

This year Europe will purchase its first oil products from Venezuelan crude refined in Belarusian Mozyr. While Belarusian citizens have a hard time obtaining visas and traveling, Belarusian oil products traverse borders freely and are welcome in the EU regardless of the state of Belarus’ civil society or its human rights situation. The Belarus-Venezuela project, whatever its economic feasibility, may help Minsk get on better terms with its immediate neighbors (perhaps with the exception of Russia) and decrease its reliance on Moscow.

In fact, precisely because the route for delivering Venezuelan oil is so long and tortuous, Belarus is forced to cooperate with Ukraine, Lithuania, Latvia, and other countries on delivering it. The first 80,000-ton "trial" crude was shipped via Ukraine's Odessa port and then by the rail to the Mozyr refinery. Other transporting possibilities include utilizing Ukraine's Odessa-Brody pipeline or Lithuanian (Klaipeda), Latvian (Ventspils) or Polish (Gdansk) ports.

While the logistical and financial aspects of the project are being criticized – especially in the Russian press, – and its profitability and efficiency indeed warrant caution, the project may bring Belarus closer to its neighbors that already offer assistance. For example, Lithuanian Prime Minister said that the project of transiting Venezuelan oil through Lithuania was “doable” and that Vilnius could even offer Minsk a discounted tariff rate. Similarly, Ukrainian Prime Minister said that the Venezualan oil project could lead to the “mutually beneficial agreements” between Minsk and Kiev and that Ukraine could provide Minsk with transportation discounts.

The first oil was produced by the JV Petrolera, and another JV will be set up to supervise the sales, with Minsk having a 25 percent stake in the venture. Alyaksandr Lukashenka and Hugo Chavez plan to invest at least $8 billion into developing the oil fields by 2025 and are also considering cooperating in the gas industry

With the terms of Russian oil deliveries to Belarus changing this year, importing oil from outside Russia becomes more economically feasible despite the distance. Moreover, oil tanker shipments cover vast distances on a daily basis, and states like China, India and Japan all buy Venezuelan oil.

Venezuela's heavy oil of the so-called Santa Barbara blend can produce 20 percent more gasoline, kerosene, or diesel fuel than Russian blends and is in high demand in the EU. Because this type of oil requires rather specific processing technologies, Belarus’ expertise and its products will be welcome in the European markets.

Belarus could import up to 4 million tons of Venezuelan crude, one fifth of what it imports from Russia, diversifying and securing its energy supplies. Minsk is also cooperating with Iran and looking into obtaining oil from Kazakhstan and Azerbaijan.

VC

Comments

Orphus system Found a typo? Select spelling error with your mouse and press Ctrl + Enter