Czechs told Russian oil supply cut "not political"

PRAGUE, July 14 Mon Jul 14, 2008 1:24pm BST

PRAGUE, July 14 (Reuters) - Russian officials have assured the Czech Republic that last week's drop in oil supplies to the central European country was for technical, not political, reasons, the Czech industry and trade ministry said on Monday.

Crude oil flow from Russia, the Czech Republic's main oil supplier, fell by about half last week, in what some speculated was retaliation for the Czech government agreeing to host part of a U.S. missile defence shield which Russia opposes.

"They excluded political reasons," Czech industry and trade ministry spokesman Tomas Bartovsky said after deputy minister Tomas Huener met officials at the Russian embassy in Prague. "The reasons are on the side of extraction and business relations between suppliers."

Russia is staunchly opposed to the missile shield plan, which will give the United States a military presence in its former Warsaw Pact ally. Moscow has in the past used oil supplies as a political tool elsewhere in the region.

"I want to believe that reasons which the Russian supplier states are only technical," Czech Prime Minister Mirek Topolanek said on Monday. "The government is not going to take any steps because at the moment there is no threat for the citizens, thanks to diversification of supplies."

If the reduction in supply is maintained until the end of the month, crude oil deliveries in July will be about 200,000 tonnes less than the planned volume of about 500,000 tonnes.

Bartovsky said Russia could potentially harm the Czech Republic more by reducing natural gas flow, as supply sources are less diversified, but added: "Gas supplies have not been reduced by a single cubic metre".

The main Czech refiner Unipetrol UNPEsp.PR said at the weekend it had begun tapping state oil reserves and raising deliveries through the IKL pipeline, which hooks up to a west European pipeline system in Germany.

The Czechs built the link in the mid-1990s to diversify their energy sources, but still take 5.5 million tonnes of crude, of their 7.7 million annual needs, via the Druzhba pipeline from Russia.

Bartovsky said Russia was expected to announce August supply volumes on Tuesday, which would show whether the lost volume would be compensated for.

The Czech Republic, with a population of 10.4 million, has about 95 days of reserves of oil and oil products.

The Druzhba runs from Russia via two branches to Belarus, Poland, Ukraine, Germany, Slovakia, Hungary and the Czech Republic.

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