Poland: GOP Unconcerned about Druzba Oil Cut

UNCLAS WARSAW 000031

SIPDIS

SENSITIVE
SIPDIS

STATE FOR EUR/NCE, EUR/ERA, EB/ESC
EUR/NCE FOR DKOSTELANCIK AND BPUTNEY
EB/ERA FOR LCATIPON, DLIPPEATT
EB/ESC/IEC FOR SGALLOGLY, JLEWANDOWSKI, RGARVERICK
NSC FOR ASTERLING
USDOC FOR 4232/ITA/MAC/EUR/JBURGESS, JKIMBALL, MWILSON
TREASURY FOR MGAERTNER

E.O. 12958: N/A
TAGS: ENRG ECON PREL PGOV PL RS BO UP GM
SUBJECT: Poland: GOP Unconcerned about Druzba Oil Cut

This cable is sensitive, but unclassified, and NOT for Internet
distribution.


1. (U) Polish Deputy Minister of Economy Piotr Naimski confirmed
that oil supply to Poland through the Druzba oil pipeline from
Belarus was cut on January 7 at approximately 2200, reinstated at
0300, then cut it again at approximately 0600 on January 8. One
hundred percent of Polish oil supply from the East transits Belarus.
Naimski noted that the oil cut is related to political problems
between Russia and Belarus in regards to tariffs for oil transport.
He characterized the Russian and Belarussian governments as playing
a game with oil resources. He added that it appears that there is
also a problem with deliveries of Russian oil at the
Russian-Ukrainian border.


2. (U) Naimski stated that the Belarussian Ambassador, in a
meeting the Ambassador requested with office directors at the
Ministry of Economy, stated that the official position of the
Belarussian MFA is that deliveries of oil to Poland continue and
that there is no supply problem. Naimski stressed that this is
untrue, that as of his 1300 press conference on January 8 there is
no supply of oil at the Adamov supply point on the
Belarussian-Ukrainian border.


3. (U) Deputy Minister Naimski emphasized that he is not concerned
about Polish energy security and the oil stoppage because Poland
currently has 80 days of oil and fuel supply in storage. Consumers
should not fear price hikes or lack of supply. He also explained
that the Plock and Gdansk refineries have adequate storage reserves
that will allow them to continue operating until they can contract
to purchase additional oil for delivery to the Gdansk Naftoport if
the dispute drags on. The Gdansk Naftoport and the Gdansk-Plock oil
pipeline have sufficient capacity to allow refinery operations to
continue using spot oil purchases. PKN Orlen and Lotos, owners of
the Plock and Gdansk refineries, are currently negotiating spot
contracts to ensure continued supply.


4. (U) The GOP informed the European Union, the International
Energy Agency (IEA),and the German government, as EU President, of
the situation. Naimski used his press conference to assert that the
cut-off proves that the GOP should continue pursuing the
Odessa-Brody-Gdansk oil pipeline as a way to diversify Poland's oil
supply. He also asked the Sejm to quickly pass pending legislation
that is required for Poland to join the IEA - which Poland hopes to
join this year.


5. (SBU) Comment: Some of the GOP's moves in the last year to
improve Poland's energy security appear to be paying off in the
current situation. After last January's gas disruption, the GOP
increased oil and gas reserves and began to seriously pursue IEA
membership. With 80 days of oil reserves and the oil port in
Gdansk, the GOP can afford to sit back and watch the
Belarussian-Russian spat play out. Deputy Minister Naimski laid
blame equally for the cut-off on both the Russian and Belarussian
governments. If the GOP continues to stay neutral in the fight, it
will help to ensure that its companies will be able to negotiate
spot contracts and keep the country humming.

HILLAS