Thursday, March 06, 2008

Gas crisis artificially created, says Ivchenko

Gazprom and NAK Naftogaz Ukrainy have issued a joint statement that their latest gas spat has been resolved, and normal gas supplies to Ukraine have resumed.

A few hours before, former head of Naftohaz Ukrainy, Oleksiy Ivchenko had been interviewed by the BBC Ukrainian service He provided interesting insight into Russian-Ukrainian relations in the gas sphere.
  • Contrary to other reports, he claimed Ukraine has only several days-worth of gas stored in its reservoirs.
  • The absence of an agreed position by the Ukrainian side is an obstacle to solving the problems with Gazprom.
  • The 'debt problem' was created on purpose.
Ivchenko was head of Naftohaz at the time of the last gas crisis, but, he claims at that time there was a comfortable 26Bcm of gas belonging to Ukraine in the country's underground storage facilities. This time he claims there is none. All the gas currently stored there belongs to the middlemen or to Gazprom.

"The main aim of the Russian side, I to gain the gas transport system of Ukraine," says Ivchenko.

When asked if he considers it to be a provocation that Ukraine has [gas] debts, he replies:

"Yes, I consider this a provocation, because in reality there are no debts as such for 2007. The debts have been created artificially between the Ukrainian and Russian side, sadly, with the agreement of both Ukrainian and Russian officials, in order to reveal or to conceal the debts, as appropriate, depending on the results of the [early parliamentary] election."

BBC: "Are you hinting it was those in the Yanukovych government?

Ivchenko: "Yes..because I do not understand the situation, if this wasn't the case, why UkrTransGaz , for example, received 7Bcm of technological gas in 2007 required to pump Russian gas to Europe via Ukraine's gas transport system. For the first time in 2007 the Ministry of Fuel and Energy forced UkrTransGaz to purchase this technological gas not from [its parent company] Naftohaz Ukrainy, but from [middleman] UkrGazEnergo for $140. This, when at a transit rate of $1.6 the price of this technological gas should be $95. In other words, UTG was assuming covering for costs of $95 from the Russian side, but was paying $140 for technological gas. Where was it supposed to find the difference between $140 and $95? From nowhere. In this way, Naftohaz's debts to UGE and RUE were accumulating, as were debts of RUE to Gazprom.

Qu: If the results of the elections had been different and Yanukovych continued to be PM, would have this problem have arisen?

Ivchenko: I think the Russian side would have kept quiet for some time, but the situation would have led to ever-increasing debts. Then an international company, e.g. RUE files a claim against Naftohaz for non payment of debts; Naftohaz is declared bankrupt and Russia receives the gas transport system of Ukraine and its assets abroad on a plate.

Ivchenko suggests that in order to finally sort out the problems in gas relations with Russia, the business has to be conducted within an absolutely transparent market relationship, i.e. proper market price, and proper market transit fees: he suggests $250 per Tcm and $3 per 1000cm/1000 km transit fee.

He also suggests 'portions of the politikum', both Ukrainian and Russian, benefit from the current structure which employs middlemen, hence the difficulty is their elimination.

p.s. 'Kyiv Weekly' provides some historical background [in English] to the Russian/Ukrainian gas difficulties, and explains how the Ukrainian side significantly weakened its own position after the New Year 2006 gas crisis.

It concludes: "Ukraine did not have to introduce any changes in relations between the two sides. Nevertheless, the Ukrainian government ventured on altering the format of mutual relations. On January 3rd [2006] in Moscow separate agreements were signed on the transit of gas through the territory of Ukraine and supplies of gas to Ukraine. It is in this way that the contractual obligations in the conditions of gas supplies to Ukraine and its transit to Europe were violated and the Ukrainian government failed to maintain its edge fixed legally on the international level."

Gas is flowing again to Ukraine, but somehow LEvko does not think this will be the end of the matter.


Anonymous said...

Thanks for the link to the statement - very interesting how there is NO mention of the newly elected Pres. Medvedev nor Prime Minister Tymoshenko.
Shows venom.

As does the following quote from a news story about the end of gas cuts to Ukraine - "Meanwhile Russia's Gazeta newspaper quoted energy expert Tamara Kasyanova as predicting that the row would help stimulate the EU to develop alternative pipeline routes bypassing Ukraine.
This would probably mean greater EU support for two Russian pipeline projects, South Stream and Nord Stream, which are seen by Moscow as a way of bypassing east European transit states, Ms Kasyanova said.",23599,


Anonymous said...

The way Tym's going about things doesn't look like anything apart from PR and campaigning - she's trying to fight both Presidents - after they spend hours reaching "an agreement" she publically says it's rubbish and she's going to negoiate a new one. Now how are they going to react? "Sure we were wasting our time,lets start again. Thank you for pointing that out". Ok so even if she was caluclatedly provoking if she wants to fight all the corrupt practices she needs some kind of consensus and better support in Ukraine which she doesn't seem to care about building.

elmer said...

I don't see how anyone in his or her right mind can call what was "agreed to" between Yushchenko and Putin any sort of agreement - other than an agreement to continue corruption, and replace existing corrupt intermediaries with new ones.

In order to continue the corruption.

What were the terms of the so-called "presidential agreement," reached after a few minutes of talk and a handshake? Price? Volume? Source? Terms? Length of time? Effective date?

Noone knows - because by their own admission, the presidents "agreed" that there were things to be discussed out of public view.

Anyone who claims that there was a firm, understandable "presidential agreement" - produce the document, please, where anyone can see it, signed by all necessary parties.


There is never going to be any consensus on corrupt practices, because the ones who are participating in corruption are also part of the government.

And the hogs that are participating in corruption will not pry their fingers and noses and mouths loose from the corruption trough - they will have to be dynamited out of there.

The foxes are watching the hen house.

Yushchenko was the one who declared that "corruption is destroying Ukraine."

Well, here's a prime example.

Again, please produce the signed agreements - anyone.

If they are government agreements, they ought to be open for public inspection.