Our investigation looks at how the Belarusian authorities got themselves into oil debt and what else Minsk owes Caracas.

ONCE UPON A TIME IN VENEZUELA

A source from a Belarusian state agency gave us documents showing Belarus has still not paid a Venezuelan supplies contract for oil that was delivered 10 years ago, during Hugo Chávez's presidency. The debt is up to $1.5 billion.

We have a copy of a document dated September 2015 which was prepared for a session with the Belarusian Prime Minister. It indicates the Belarusian authorities did not intend to send the money to Venezuela. In a nutshell, it says that Belarus decided “to treat the debt as aid provided by the Bolivarian Republic of Venezuela, rather than Belarusian liability”.

Our colleagues at OCCRP tried to find out whether Venezuela plans to claim this debt and sent an enquiry to PDVSA, the state oil and gas company of Venezuela, but have not yet received an answer.

Belarusian Oil Company CEO Mikhail Kostsechko refused to comment when we called him and pretended to be unaware of any liability.

But the documents we have are very clear about what this debt is and its origin. At issue are about 9 million tons of oil delivered to Belarus under an agreement with Venezuela in 2010, at the height of an “energy war” with Russia.

At that time, the Kremlin refused to make concessions on duty-free supplies of crude oil to Belarus’ oil refineries. Vladimir Putin tried to drive Belarus into the Eurasian Economic Union on his own terms. Belarus President Aleksandr Lukashenko resisted and visited Chávez to negotiate an alternative oil supply.

The agreements were reached due to friendly relations between the two country leaders. At the time, the two countries were already providing each other with considerable assistance: Belarus helped develop Venezuela's air defence system, while Venezuela, in its turn, granted Belarus a $500 million loan.

Despite all efforts to make transportation cheaper, according to Belstat, Russian oil was still cheaper for Belarus than Venezuelan and Azeri grades. But Belarus benefited from its cooperation with Venezuela and Azerbaijan: Lukashenko managed to bargain with Putin for duty-free oil supplies.

From 2010 to 2012 Belarus bought from PDVSA some 9 million tons of crude oil and paid over $7 billion.

After a thaw in relations between Lukashenko and Putin, Belarus stopped buying Venezuelan oil. But the 20% still owed – nearly $1.5 billion – has not been paid in 10 years.

Venezuela offered to buy shares in Naftan oil refinery, Minsk Automobile Plant and Belarusian Steel Works as a way to discharge the debt. Belarus offered to repay the money in Belarusian goods. This all happened behind the scenes. Publicly, the debt appeared to not exist.

Venezuela thinks of it as a debt; to Belarus, it is a gift. “This debt is a constant topic of discussion between Belarus and Venezuela,” says Anatol Kotau, a former diplomat and member of the Belarusian presidential administration.

While negotiations continue, Venezuela does not appear to be making any official demands on Belarus. It could apply to an international court for recovery of the money. Venezuela could use the money. Its standard of living is very low today.

THE TECHNICALITIES

There were other projects. Lukashenko and Chávez agreed that Belarus would supply Venezuela with $270 million worth of machinery, in particular tractors.

The tractors were sold to Venezuela at almost twice the market price, according to export data for 2008-2014. While Cuba, Nicaragua and El Salvador were buying a Belarusian tractor for $15,000-$17,000 in 2011, Venezuela was paying $45,000.

We called the Minsk Tractor Works to find out what kind of tractors were supplied to Venezuela, but they were not in the mood for talk.

“Let’s end the conversation right away. We won’t make any comments to you,” an MTW representative said.

Other joint projects with Venezuela were less successful. Belarus tractor and MAZ truck assembly plant construction began in the Venezuelan state of Barinas in December 2010. The work was completed in just 18 months at an estimated total cost of $55 million for both projects.

The plan was to produce 10,000 tractors and 5,000 trucks per year. Belarus and Venezuela wanted to sell them not only to local farmers but also to neighboring countries. But it did not work out. In 2017, the factories suspended work because of an economic crisis in Venezuela. In five years of operation, only about 3,000 tractors and a similar number of trucks were produced.

We have tried to get in touch with MTW and MAZ to find out what is going on in the joint ventures, but they have refused to speak to us on the phone. Last December, our colleagues in Venezuela visited these plants and reported them being out of operation.

CASHING IN ON MISFORTUNE

Another unsuccessful project involved housing construction. Shortly after the oil contract was signed, thousands of families were left homeless in Venezuela due to flooding. Chávez launched a housing construction program, and Belarus decided to participate. The greatest potential was seen in building 10,000 homes in the Fuerte Tiuna district of Caracas.

The cost was estimated at $750 million. Our information is that Venezuela has only made a small part of this payment, and construction has been stalled for a long time.

“As long as the money was on the table, the Belarusians did the building work. Once the money was gone, there was no way for them to continue,” explains a former Belarusian diplomat, Pavel Slunkin, who worked for the construction company Belzarubezhstroy in 2011-2012.

In the summer of 2022, the Belarusian Embassy in Venezuela reported that more apartments were finally commissioned. The pause was attributed to Western sanctions against Belarus and Venezuela. In 15 years, Belarusians have only built 8,000 flats out of the planned 20,000. The overall cost is estimated at $320 million.

2010 was the most successful year for Belzarubezhstroy, with new contracts signed for both housing construction and Belarusian machinery assembly plants during another visit by Lukashenko.

High-ranking Venezuela officials assisted Belarus businessmen. “At the height of all these construction projects, Chevtsov could enter fairly important offices precisely because he enjoyed the patronage and help of a friend of Hugo Chávez,” Kotau told us.

There is another interesting fact in Chevtsov's biography. In October 2011, he was detained by the KGB on suspicion of grand theft in a case related to housing construction in Venezuela. In Venezuela, Belzarubezhstroy was suspected of ties with a mafia engaged in iron smuggling. The theft of construction materials was also reported.

Lukashenko himself commented on the case on December 23, 2011.

“This is a common criminal case, nothing extraordinary, but this is not the first time this gentleman has come to the attention of law enforcement agencies. Damage to the state? Two, three times the amount – put money on the table and off you go. If he does not pay the money, he will go to prison,” BelTA state media agency quoted him as saying.

The media wrote that Chevtsov was released in December 2012. For a long time, nothing much was heard about him.

The owner of a large cottage in the Drazdy estate and a four-bedroom flat in the center of Minsk, he still chose to leave Belarus. However, he is still associated with Belzarubezhstroy. In April 2022 the company was renamed ViaSETrade.

Its website does not mention any projects in Venezuela. However, according to our sources, the company’s shareholders have not changed, and Chevtsov is still the board chairman.

We asked Chevtsov to comment on his involvement in Venezuela. Through a representative, he refused to comment. Chevtsov’s current location is unknown.

We thank CyberPartisans for their help in making this article.