New ally for Yulka in battle to eliminate RUE

Tymoshenko's KabMin is to propose a seasoned politician, one of Ukraine's biggest industrialists, Vitaliy Hayduk, for the currently vacant position of vice PM resonsible for the Fuel-Energy complex. The proposal is no surprise. I have written a small biography on the man before.

Today's "Ekonomicheskiye Izvestiya" includes this story, parts of which I've translated below, entitled: "Tymoshenko will receive another deputy"

"Mr. Hayduk was vice-premier responsible for the fuel and energy complex [PEK] previously - in 2003, in the first government of Viktor Yanukovych. He also had experience as the head of fuel department during premier Anatoliy Kinakh's stint as PM (November 2001 - November 2002), and was first Deputy Minister of PEK in Victor Yushchenkos' government in 2000).

At the beginning of 1998 Hayduk was offered chairmanship of the newly-created National stock compay "Naftohaz Ukrainy", but he turned it down. As a result [the notorious] Ihor Bakay got the job.

In January 2006 Hayduk turned down the post of vice-premier of PEK, even though President Yushchenko stated in the interview on four Ukrainian television channels on 30th December, 2005, that he signed an edict appointing him. The document was never published. Hayduk says that he turned down the post after the conclusion of the January 4th 2006 agreement between the Ukraine and Russia "on regulating relations in the gas sphere", [during that winter's gas crisis], because of the introduction of RosUkrEnergo into the gas delivery scheme. RosUkrEnergo is controlled by Russia's "Gazprom", and Ukrainian businessman to Dmytro Firtash. "I do not see any possibility, under the given circumstances, of working at that post.." he said.

Hayduk and Tymoshenko are united in their dislike of RosUkrEnergo. They can combine efforts in government to remove it from the gas delivery scheme. On Saturday Tymoshenko confirmed her intentions to enter into direct relations with "Gazprom", and also to liquidate the internal gas market monopolist "UkrGaz-Energo", owned in equal shares by "RosUkrEnergo" and "Naftohaz Ukrainy", which supplies gas entering Ukraine from Russia.

Liquidation of "UkrGas-Energo" should positively influence the financial state of "Naftohaz". The minister of PEK, Yuriy Prodan, even before his recent appointment to this post, stated that at present, in essence, instead of "Naftohaz", it is "UkrGaz-Energo" [only] that operates in the [Ukrainian gas] market: the previous government created "specific additional conditions of profitability" for the latter.

"The profitability of UkrGaz-Energo is provided at the expense of "Naftohaz". We have substantially worsened the financial state of "Naftohaz", since it does not earn anything on the domestic market and cannot even obtain it's share of the activity of "UkrGaz-Energo", said Mr. Prodan.

Other factors which have lead to he [dreadful] financial situation which "Naftohaz" is now in will become known on 10th February, when the the inter-departmental verification commission investigating "Naftohaz's"financial-economic activity during 2006-2007 and headed first vice- premier Oleksandr Turchinov, completes its work. [Will criminal charges be brought against any of the company's bosses, LEvko wonders?]

Among Hayduk's priorities will be to ensure Caspian oil flows through the Odessa-Brody pipeline in the European direction. At the moment Russian-British TNK-BP Urals oil is transported in the reverse direction [for further transport by sea through the Bosphorous]. At the end of last week the chairmen of two Western Ukrainian refineries wrote a letter to the President, to the prime minister, and to the chairman of "Naftohaz" with a request to make a decision on the "averse functioning of the Odessa-Brody oil pipeline". [Hayduk has always supported transporation of Caspian oil northwestward though this pipeline.]

LEvko considers that for Tymoshenko removal of the gas intermediaries and dealing direct with the gas producing countries has become almost a crusade. But she may well have influential allies in Gazprom who would like to see the back of RosUkrEnergo too.