Azerbaijan has agreed to supply crude oil to Belarus on behalf of Venezuela and, in return, the Latin American country will meet Azerbaijan’s oil export commitments to the United States, state-run energy company SOCAR said.
“We signed swap deals between Azerbaijan, Belarus and Venezuela on oil supplies in the amount of 5 million tons of oil per year from 2011,” the head of SOCAR, Rovnag Abdullayev, said Monday.
Abdullayev said Belarus will replace 5 million tons of crude per year to be imported from Venezuela with Azerbaijani oil. In exchange for the oil supplied to Belarus, Azerbaijan will acquire the same volume of Venezuela’s oil and dispatch it from there to the US market by tankers.
He said Azerbaijan would supply Belarus with oil via the pipeline from Odessa on the Black Sea to Brody.
Although the Azerbaijani option is cheaper for Belarus than importing Venezuelan oil, said Alexander Nazarov, an oil analyst at Metropol, it is “definitely more expensive than importing Russian oil” and made “no economic sense.”
During a visit to Belarus in October, Venezuelan President Hugo Chavez agreed to supply the former Soviet republic with 30 million metric tons of oil over three years from 2011 in a deal worth as much as US$19.4 billion.
Venezuela’s oil minister, Rafael Ramirez, said later that his country would boost crude oil exports to Belarus by 150 percent next year to 200,000 barrels per day.
Earlier in November, 26, Venezuela and Belarus agreed on an annual oil delivery of some 10 tons starting from 2011. Currently, the oil form Venezuela was transported to some Ukrainian and Baltic ports.
Although Belarus reached a deal on oil export duties with Moscow this month, Minsk has been keen to diversify some of its sources of oil away from Russia.
SOCAR’s Abdullayev said another deal, to deliver Azeri Light crude oil, was reached with China and Taiwan during a visit he made to the region earlier this month.
“It will also help to diversify our oil deliveries,” he said.
Azerbaijan’s oil production rose 13.5 percent in 2009 to 50.376 million tones, breaching the figure of 1 million barrels per day for the first time. The country plans to produce 52.0 million tones of oil in 2010.
Azerbaijan ships its oil via five main routes – Russia’s largest Black Sea port of Novorossiisk, neighboring Georgia’s Supsa, Batumi and Kulevi ports, and Turkey’s Ceyhan.