Oil and Gas Features
Ukraine - Russia's ultimate blackmail victim
Jun 17, 2006, 3:59 GMT
Kiev - Bad news for stable European energy prices: the Ukrainians and Russians appear dead set on renewing their natural gas dispute, in the very near future.
Only six months ago Moscow and Kiev cut a 'historic deal' to end Russia's brief cut-off of natural gas to Ukraine - a move which is still causing jitters among European governments and energy consumers.
Under the accord, Russia's state-owned Gazprom hiked the price of natural gas sold to Ukraine from one-quarter to approximately one-half of international market prices, in return for which Ukraine agreed to ship Gazprom's gas to Europe via Ukrainian pipelines at cut-rate transport prices.
A key feature of the contract was a Ukrainian vow to stop its 15- year long practice of pilfering large amounts of Russian gas transiting through the country.
Another change was a shift from barter to money accounting: for the first time a dollar price, rather than a volume of gas compensation, was formally set as the cost of shipping natural gas through a Ukrainian pipeline to Europe.
As Ukrainian President Viktor told Deutsche Presse-Agentur dpa at the time: 'This is absolutely the best agreement we could have hoped for, and very favourable for Ukraine. Tell me please, where else in Europe can one buy gas (at half international market rates)?'
By the standards of developed European countries with lots of experience in international agreements, not much time has passed since January, and Yushchenko's brave words.
In the former Soviet Union, however, time moves at a different rate - especially when it comes to contractual terms.
The former Soviet republics are currently once again firing energy-related broadsides at one another, just as Europe was hoping to settle down to stable gas prices following the apparent resolution between the Ukrainians and the Russians.
The terms of the five-year deal, energy experts on both sides are now pointing out, are subject to review every six months, with changes allowable if both sides agree to it.
The Ukrainian position on that is clear and simple.
'We have a contract, and we are completely satisfied with its terms,' said Ukraine Prime Minister Yury Ekhanurov in an April speech. 'And the gas agreement cannot be changed unilaterally.'
However, in the former Soviet Union, especially in big business, there is no such thing as an ironclad contract. A case in point was the January crisis, throughout which Ukraine argued, unsuccessfully, the Russians had no right to renegotiate the deal.
Although Gazprom's management says it will not seek to review the terms of the agreement unless the Ukrainians ask for it first, Russian President Vladimir Putin has repeatedly declared that Ukraine, like other Gazprom customers, should pay the international market price for gas, currently around 230 dollars per thousand cubic metres.
'Independent' Russian political experts with close ties to the Kremlin, such as Gleb Pavlovskiy of the Moscow-based Effective Politics Foundation, have in recent weeks appeared on Russian news programmes (which are viewable in Ukraine).
They were pushing the same ominous message: The Ukrainians aren't paying enough for their Russian gas, they are breaking the present contract's terms by both pilfering gas destined for Europe, and they also pilfer by failing to pay for the gas.
Ukrainians analysts, of course, beg to differ and argue the gas Russia is selling Ukraine is not purely Russian, but blended with gas from Central Asian nations, for which Ukraine also has existing contracts with fixed prices.
Their position is: The Russians are paid up in full for gas used by Ukraine, pilfering is a thing of the past, and the real problem is Moscow is not crediting Ukraine in full for gas Kiev ships to Europe.
And then there are Ukraine's stormy domestic politics to consider. New constitutional changes in the country drastically reduce the ability of the Ukrainian President to make international contracts, transferring the authority to parliament and a parliament-elected Prime Minister.
Ukraine held parliamentary elections in March, and thorny coalition talks have prevented the naming of a new cabinet. But already, there is a strong front-runner for the Prime Minister job: Julia Timoshenko, Ukraine's top female politician, who made her fortune during the 1990s in importing Russian natural gas into Ukraine.
Timoshenko, a populist politician who trounced Yushchenko's own party during the recent elections by promising to end graft and corruption, has made the 'review' of the gas agreement with Russia the top item of on her list of things to do, if she becomes Premier.
'It is an illegal agreement violating every business principle and absolutely not in the interests of the Ukrainian people,' Timoshenko told Deutsche Presse-Agentur dpa in a March interview. 'It is in the interests of corrupt politicians and I absolutely will do everything I can to oppose it.'
'I think we will see some changes,' she added.
© 2006 dpa - Deutsche Presse-AgenturCOMMENT
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Older Talkback
page: 1
Another bullsh*t full of lies. Looks like if some statement is against Russia, it doesnt need to be proven. Its truth by default. The most funny argument is contract beetwen Russia and Ukraine. So Russia should sell its gas for 20% of price just becouse 'Russia agreed to do so'. LOL No proofs of course of that, but some people thinks its normal to assume such things like reasonable argument.
Now back to the lie and nonsence that idiot wrote above.
1. There was no deal with Ukraine on January 1st. You cannt renegotiate something, that was never negotiated before. Ukraine were stealing gas without any contract.
2. Ukraine dont have any contracts for gas from Central Asis. They cannt have such contracts, becouse they dont pay money for gas more than a year and they never paid for gas from Central Asia that they used whole previous year.
3. In the new contract with Ukraine Gazprom didnt 'hike the price to approximately one-half of international market prices', Gazprom set price for Russian gas at $230, but for the first 6 month at $95 (based on a deal with a cheap gas from Central Asia), if Ukraine is satisfied with the deal, and dont want to negotiate anything, then its free to buy gas for $230 starting July.
Hm, previous post is intresting, but it's fairy-tale of some russia-loving guy.
Situation is such:
1. Ukraine and Russia had signed and agreed contract on gas consuming and transportation at FIXED price till 2010.
The price of gas for Ukraine was 50$
2. After democratic changes in Ukraine, rising of influence on Ukraine of Europe and USA, Russia in ultimate form claimed, that they want to rise proce of gas.
Of course, Ukraine could ignore this, cause of valid contract, and in case of fault in gas-supply call for international court. The problem was, that a) it was a real cold winter, and our infrastructure could have been broken in a few hours, without gas; b) Ukraine's willing not to rely on Russia's unstable and aggressive politic
3. So, the new agreement was signed. It contains a FIXED price for Ukraine, for another few years, not 6 month.
now Russians insolently want to rise gas price for another time...
It's a PUTIN national development strategy -- to eliminate otherwise-minded.
And of course, Ukraine HAS signed, and legitimate contracts with Kazahstan till 2020.
And the only problem is -- Russia is blocking transportation of this Kazah's gas through Russia's territory to Ukraine.
(Kazah's gas is a half of Gazprom's gas supplies to Europe.
Gazprom is buying Kazah's gas at minor prices, and sell it to Europe's consumers many times expensively. -- Kazah's can't export theis gas directly. Russia's blocking)
ROFL
Dude, you seem to live in some virtual reality. So much delusion and nonsense. Is this brainwashing of your ukrainian TV or is it typical for citiezens of your country-thief to lie? Look facts, if clowns from your goverment say something, it doesnt mean its true, but most likely its lie.
1. Fairy tale about contract, that Ukraine had till 2010 - bwahahaha Just ask yourself, why would Russia sign such contract? So they had contract, but strangely agreed to pay more. Why didnt you go to court? There was cold? So what? You could still freely steal gas till the court decision. And even after signing new contract, you can go to court to seek compensation for breaking previous contract. By the terms of contract you had, you should anually sign the deal for the quantity of gas and its price for next year. Full contract freely available on the net. Its always easy to lie, but when we talk about proofs - nothing.
2. About fixed price for 5 years. Same situation. Another fairy tale from lying Ukrainian goverment. Again no reason for Russia to sign such a nonsense contract. Fixed price for 5 years - is $230. Not fixed - Turkmenistan gas. $95 - cost only 34bln CM of gas. This contract freely available on the net too.
3. Contract with Kazahstan its really a joke LOL There are just 5% of gas that u need from Kazahstan. For Turkmenistan, where u get 80% of gas, you dint pay for gas from previous year. Kazahstan and Turkmenistan are going to rise the price to $110-$150. What contracts are you talking about, if you dont pay for gas? LOL And yes, the only way you can get gas from Asia, if you have agreement with Russia, so your contracts doesnt matter.
Its just common sense. Dont sh*it anyone's mind with mythical contracts, orange 'democracy' and other bullsh*t. Just pay market price for gas or dont use it. Its simple.
There is really no ethically viable reason for gas to cost so much.
People are being ripped off. The rich get more powerful and the poor become more manageable because theres nothing that can be done while prices rise and salaries do not.
Why coudn't I have been born during Teddie Roosevelts time as President? We're only looking for the SQUARE DEAL!
You know Rich people could care less if everyone else just died.
And it was only them left so they can go golphing and talk fashion together.
I am 41 years old and have a 5th of gas in my car and don't get paid until Thursday. I am broke and have to get up at 6 am to go work for my rich boss who owns the only company of it's kind in the world and makes 100 million a year and I get 4 percent raises every 12 months.
Get another job you might say. But companies like this hire who they can pay the least first.
The cost of living goes up but the quality of life declines daily.
Gas should be no more than 89 cents a gallon.
America is no longer a free country. That makes me sad. When taxes the reason we formed this country are now exactly are what's going to kill the average citizen.
page: 1
OBKenobiJun 17th, 2006 - 08:03:12
When OPEC and Texas does it, it's business. When Russia does it, it's blackmail? I think they have a legal right to charge anything they want?
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