Wednesday, January 11, 2012

Ukraine could do much more to renegotiate gas price with Russia

Today former PM Yulia Tymoshenko wrote a letter to Parliament from her prison cell warning that a new government would denounce any possible lease of the Ukrainian gas transportation system.

She also declared that the now infamous contract which followed the head-to-head Putin-Tymoshenko gas crisis negotiations in early 2009 included a clause whereby the price of gas could be modified without penalty.

On 22nd January 2009 'Ukrainska Pravda' published what they alleged was a leaked copy of the 10-year contract signed by former Naftohaz Ukrainy head Oleh Dubina, and Gazprom's CEO Alexey Miller.

Sure enough, paragraph 4.4 says: "If either side declares that circumstances on the market for fuel-energy products have changed significantly in relation to that which the sides substantially expected when the current contract was concluded, and the contract price indicated in paragraph 4.1 of the current contract does not reflect the level of prices on the market, then the sides [can] enter into negotiations on the review of the contract prices corresponding to the conditions of the current contract."

The contract also includes articles [paragraph 8.1 onward] on regulating disputes by arbitration, and also confidentiality clauses.

Why does the current adminstration, instead of complaining about the high price they are paying for Russian gas - supposedly much greater that that being paid by European customers, do everything possible permitted under the terms of the contract to get the price lowered?

Reason? Side-deals and huge kickbacks?...And as a bonus, Tymoshenko can take the blame and be locked away for seven years?


Anonymous said...

So - the contract says the price can be re-negotiated. So what? Of course, the government is negotiating but the Russians can put what conditions they like in return for "renogiating" the price which according to reports is what excatly they're doing. eg; joint ownersip of the gas transit system. So what does it help Ukraine that there is such a clause?

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