Russia restricts oil shipments to Belarus after Uralkali arrest

29 August 2013 22:58  [Source: ICIS news]

HOUSTON (ICIS)--Russia has further restricted oil shipments to neighbouring Belarus, with the cuts stretching into the fourth quarter, officials said on Thursday.

Belarus relies solely on Russian oil to keep its two major refineries operating.

Earlier, officials had announced there would be a 25% reduction through the month of September, citing the need for maintenance work with the pipeline system. However, public sentiment was the decision was prompted by the arrest of Uralkali CEO Vladislav Baumgertner in Minsk on 26 August.

Baumgertner was accused of abusing his authority. Russia demanded Baumgertner's immediate release and warned that the actions of Belarus could result in political and economic consequences.

Belarus authorities have said the arrest was the result of Baumgertner’s role as chairman of Belarusian Potash Co (BPC), a partnership which marketed potash on behalf of Russia-based Uralkali and Belarus-based Belaruskali.

Baumgertner was accused of favouring his company, Uralkali, over Belaruskali.

The BPC venture fell apart in July when Uralkali announced it was ending the partnership after accusing Belaruskali of selling potash independently.

Belarus police have said Baumgertner would be held in jail for two months in a pre-trial detention center of the Belarusian National Security Committee. A hearing on his release will be held next week.

Meanwhile, Russian diplomats have received permission to see Baumgertner on Friday.

“The Russian government is closely watching the situation over the detention of the Uralkali general director. We still consider this situation unacceptable,” said Russia's deputy prime minister, Arkady Dvorkovich. “It looks inadequate, to say the least, and is not common for partnership relations.”  

He further said the country may pursue action on a range of issues regarding bilateral cooperation with Belarus.

By: Mark Milam
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