Belarus unlikely to benefit from purchase of new oilfield in Russia - expert

<p> MINSK, Nov 5 – PrimePress. Belarus will not get any significant benefits fr om the purchase of a new oil field in Russia, as promising production areas have long been distributed among Russian oil companies. Besides, the potential benefits of own production will be offset by the consequences of the “tax manoeuvre” when, by 2024, Russia's oil export duty will have been zeroed in favour of an increase in the mineral extraction tax (MET). </p> <p>   </p> <p> Konstantin Simonov, Director General of Russia’s National Energy Security Fund, made a statement to this effect in a comment for RIA Novosti on November 5. </p> <p>   </p> <p> As previously reported, during a telephone conversation on Nov 4, Russian President Vladimir Putin supported the proposal of his Belarusian counterpart Alexander Lukashenko to purchase an oil field in Russia. They agreed to discuss the issue in greater detail during the nearest negotiations. </p> <p>   </p> <p> Russia not very interested in oil production partnership with Belarus </p> <p>   </p> <p> “It is not worth considering this (the possibility of Belarus buying a new field in Russia – editor’s note) as a sensation, as a panacea for Belarus - is not worth considering either. This is presented by Lukashenko as some kind of breakthrough, but there is no breakthrough here,” Prime reports citing Simonov as saying. </p> <p>   </p> <p> The expert reminded that since 2013 a Belorusneft subsidiary – Yangpur Oil Company – has been performing oil production operations in Russia’s Yamalo-Nenets Autonomous District. In 2019, Yangpur won the tender for the right to use subsoil at the 493.5 sq km Yuzhno-Tydeottinsky license area. The new asset was acquired for geological study, exploration and production of hydrocarbons. Previously, Yangpur obtained a license for geological study, exploration and production of hydrocarbons at the Izvestinsky area, where it produced 193 thousand tonnes of oil in 2018. </p> <p>   </p> <p> “Of course, we are talking about the fact that it is not the state of Belarus that will own some new asset, it will most likely be Belorusneft,” he said. </p> <p>   </p> <p> According to Simonov, for Russia such a partnership with the Belarusian company is not particularly interesting fr om the point of view that foreign investors are usually attracted for new investments or access to technology for complex projects, for example, in the Arctic, on the shelf, for tight oil. </p> <p>   </p> <p> “Belorusneft does not have any amazing competencies or a large amount of finance to become a significant player in the Russian market,” the expert said. </p> <p>   </p> <p> Russia has good oilfields for Belarus </p> <p>   </p> <p> However, Belarus will not get much benefit from the potentially new field either, believes Simonov. He explains: Minsk is now buying oil in Russia without paying export duty, having a lower price than in Europe. But because of the tax manoeuvre in Russia, the duty will zero out by 2024 in favour of an increase in MET. </p> <p>   </p> <p> “This means that if a Belarusian company comes to Russia ... for a new greenfield project, </p> <p> then, accordingly, it will start production by this year 2024. Yes, it will extract oil, self-extracted oil is cheaper, but MET will also have to be paid,” said Simonov. </p> <p>   </p> <p> In addition, according to the expert, Belarus is unlikely to get a prime field with easy oil - such vacant projects no longer exist in Russia. At the same time, Minsk annually buys about 17-18 million tons of oil from Russian companies. </p> <p>   </p> <p> “I highly doubt that the president (Putin – editor’s note) has authorized Belarus to produce 18 million tons. And again, there are no good oil fields in Russia today, wh ere you come, make a whole with a shovel, and get a fountain of oil pouring. Everything good was been distributed a long time ago. You can either come to a greenfield, wh ere you need to invest serious money, or to some complicated stories. We have a lot of oil, but it is not easy,” said Simonov.” End </p> <p>   </p> <p> Belorusneft plans to increase oil production in Russia to 1.7 million tonnes by 2026 </p> <p>   </p> <p> Meanwhile, Belorusneft has previously announced plans to increase hydrocarbon production in Russia by 54.5% over the next five years, from 1.1 million tonnes planned for 2020 to 1.7 million tonnes by 2026. </p> <p>   </p> <p> In September 2020, Belorusneft and Gazpromneft discussed the possibility of creating an alliance to develop hydrocarbon fields in Western Siberia as part of the Fortuna project. According to Petr Povzhik, Belorusneft’s Deputy Director General for Geology, the partnership with Gazpromneft in the Russian market is strategic. “At present, the concept of an alliance between Belorusneft and Gazpromneft to develop mature assets in Western Siberia is being actively developed,” he said. </p> <p>   </p> <p> In his words, this will allow Belorusneft to increase its presence in Russia not only with technological but also with scientific service. For example, the corporate centre BelNIPIneft has already participated in the preparation of a comprehensive project for the development of the Kholmogorskoye field for Gazprom Neft-Noyabrskneftegaz. End </p>

2020-11-06

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