Sunday, January 18, 2009

Murky deal

At first sight it looks as if the Russian/Ukrainian gas dispute has been resolved. Ukraine will get a 20% discount on the market price for gas in 2009 [whatever that means ], and transit fees paid to Ukraine for transporting gas westward will remain unchanged. Final signing of documents is to take place on Monday, possibly by Putin and Tymoshenko in person, in Moscow.

Smells 'fishy' to me.

When negotiating with an untrustworthy party every tiny detail has to be settled and agreed before any declarations are made - no "wriggle-room" left. It is not credible such a complex deal could be made in just a few hours, adding to suspicion that the broad outline revealed at the press conference could well differ from the closed deal actually struck.

Have any of the principles of negotiations declared by Yulia Tymoshenko in her Friday statement:

  • "no middlemen;
  • direct relations between Naftogaz and Gazprom;
  • mutually beneficial prices for gas and transit;
  • no talks about possible privatization or any other forms of transfer of the Ukrainian gas transportation system",
been conceded?

If, as it appears, Ukraine 'lost out' on the deal, Yulia Tymoshenko will blame president Yushchenko for 'poking his nose in' during the last days of last year. The ground for this was prepared in Friday's statement by the PM.

But at least Tymoshenko has gone for a floating price - better when prices are falling, rather that a fixed price deal - better when prices look like going up.

And what's to be done about Gazprom's claim that the Ukrainian side still owes $614 million dollars in late payment charges? Hardly worth mentioning, is it?

1 comment:

Anonymous said...

Gas em up.

I think the negotiations took more then a few hours. They had been at it for months and I am sure they all knew what was involved and what each others ambient claim was. what is clear is that Ukraine was prepared to use its goe-gas position to leverage what they saw as a the best deal. I am not sure they came out any better and it looks like we might see a repeat come 2009-2010.

What Ukraine did demonstrated that it was prepared to sacrifice Europe's gas security and hold Europe customers to ransom in order to secure a "better" deal for Europe.

In the long term they caused more problems and a loss of trust then any good.

This dispute should have been resolved long before December.But at that time Ukraine was in political limo thanks to Yushchenko and his policies of division and destabilization.

It is not over just another chapter or section of an never ending ongoing state of crisis be it Gas or Yushchenko's folly.

Viva Ukrainia