Russia and Slovakia Sign Long-Term Oil Supply Deal

Russia and Slovakia signed a 15-year oil supply agreement.

Russia and Slovakia on Friday signed a 15-year oil supply agreement that will see Moscow deliver 6 million tons of crude a year to its former Soviet satellite and send a further 6 million tons through the country to Western Europe, the RIA Novosti news agency reported Friday.

The deal comes amid frayed relations over the crisis in Ukraine that have spilled over into tit-for-tat sanctions and friction over gas supplies.

The contract's cost has not been disclosed, but an average oil price of $85 per barrel values it at about $3.7 billion.

The agreement will see first deliveries in January next year and lasts through the end of 2029, after which it can be prolonged every five years. A previous long-term contract to supply oil to Slovakia was signed in 1991.

While oil supply contracts with Slovakia have been stable, the same is not true for natural gas agreements.

Earlier this year Slovakia said it was considering lowering gas imports from Russia by 10 to 15 percent in 2015. Bratislava this fall complained of unexplained gas supply drops from Russia amid Moscow's price dispute with Ukraine.

Slovakia is also negotiating lower prices for gas with Russia's state-owned supplier Gazprom and cancellation of the take-or-pay agreement which obliges to pay for a certain amount of gas even if not all of it is used.

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