Kazakhstan Parliament adopts agreement on Russian oil supplies to Pavlodar refinery 13 марта 2013, 18:23
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Pavlodar oil refinery. Photo courtesy of the company's official website
Kazakhstan Parliament has ratified an agreement between Russian and Kazakhstan governments on trade cooperation in oil supplies. Russian oil supplies will now be guaranteed for Pavlodar refinery in Kazakhstan, Tengrinews.kz reports.
“The amendments to the agreement will ensure guaranteed supplies of Russian oil to Pavlodar refinery and Russian light oil products to fully cover the local fuel market until December 31, 2013,” says the explanatory note to the draft law On ratification of the protocol on amendments to agreement between Kazakhstan and Russian governments on trade and economic cooperation in oil supplies.
The document is aimed at ensuring duty-free oil supplies from Russia to Kazakhstan until January 1, 2014. After January 1, 2014 the mutual oil supplies are expected to continue in the form of swap operations. According to Kazakhstan Oil and Gas Minister Sauat Mynbayev, this would be the best opinion because Kazakhstan and Russia would be able to fully provide themselves with oil and the swap operations would be a way to solve logistics issues only.
“If we make the swap operations none of the parties will lose any profits from oil export. The agreement provides for a compensation of losses that the Russian budget would incur because of the oil products supplies to Kazakhstan during the period of the duty-free oil supplies from Russia to Kazakhstan until January 1, 2014. To solve this issue, the parties were supposed to sign before April 1, 2011, an agreement on the terms of payment by Kazakhstan party for the operations related to oil products export outside of the Customs Union.” Sauat Mynbayev said at the plenary meeting in the Majilis (lower chamber of the Parliament of Kazakhstan).
According to the Minister, Kazakhstan will receive 6-7 million tons of duty-free oil from Russia until January 1, 2014. “Russia is losing around $500 million by exporting the oil products to Kazakhstan instead of exporting them elsewhere. They are asking us to at least compensate the losses they inure because of the export to Kazakhstan under group 27 until January 1, 2014. We will supply exactly the amount of oil that would compensate the losses, which makes around 1.5 million tons,” Mynbayev said.
Answering the question why Kazakhstan supplies 1.5 million tons of oil while Russia supplies 7 million, Mynbayev said on the sidelines of the meeting that this was the agreement. “But based on the existing legal base, all the future mutual supplies, if any, shall be made on the equivalent basis. If we take 6 million from Russia, we will have to return these 6 million back to Russia. This is the agreement,” he explained.
By Gulnara Zhandagulova