[Ohio UZO News] Ukraine: WSJ(E); EDM; RFE/RL; AP

[Deychak, Orest]

Wall Street Journal Europe

Review and Outlook

A European Genocide

November 24, 2008

Among the past century's horrors, the Great Famine in Ukraine manages to
stand out. First, for the scale of the mass starvation inflicted by
Stalin on millions of people in Europe's agricultural breadbasket.
Second, for how little the world knows about this genocide. A now-free
Ukraine wants to change that and just marked the 75th anniversary of the
1932-33 "terror famine," or Holodomor.

Starting in the late 1920s, Stalin set out to collectivize and hobble
the Soviet peasantry. His aim was to crush "the peasantry of the
U.S.S.R. as a whole, and the Ukrainian nation," wrote Robert Conquest in
his groundbreaking book, "The Harvest of Sorrow." An estimated 14.5
million people starved to death in Ukraine, Russia and Belarus when
farmland was collectivized and harvests requisitioned. The submission of
Ukraine to Moscow helped prolong the Soviet Union's life for another 60
years.

The Stalinist regime and its ideological soulmates denied the famine at
the time and later. Walter Duranty, the New York Times's longtime Moscow
correspondent, was Stalin's chief apologist, sending false dispatches
from Ukraine; he won a Pulitzer Prize. The left-leaning academy
condemned Mr. Conquest and the late James Mace, the leading researcher
of the famine, when their work appeared in the 1980s. The Berlin Wall's
collapse shamed some of the denialists. "I want to express my deepest
appreciation to all who refused to be silent," President Viktor
Yushchenko said Friday.

The exception is the current Russian leadership. Ahead of the official
commemoration this past weekend, President Dmitry Medvedev accused
Ukraine of seeking to achieve "opportunistic political goals" based on
"manipulations and distortions, falsification of facts about the number
of dead." As in Stalin's day, Ukraine's independent identity and
nationhood stands in the way of a resurgent Russian imperium. By
remembering the Holodomor, Ukrainians say -- Never again.

Eurasia Daily Monitor

November 24, 2008 

A New Ukrainian Russian Gas Confrontation


Just when the outlook for normalization in the Ukrainian-Russian gas
relationship appeared on the horizon, Russian President Dmitry Medvedev
and Gazprom head Alexei Miller have upset the gas cart.

On November 20 Kommersant Daily reported that Medvedev and Miller
threatened to charge Ukraine $400 per 1,000 cubic meters for gas
beginning in January 2009 if Naftohaz Ukrainy, the Ukrainian state-owned
energy company, did not repay an alleged $2.4 billion debt to Gazprom.

Two days later, Gazprom spokesman Sergey Kuprianov, appearing on the
Russian television program "Vesti," warned that Gazprom might be forced
to cut off gas supplies to Ukraine beginning on January 1, 2009; "As you
perfectly well understand, we cannot supply gas without a contract," he
said.

The day after Medvedev's announcement, Ukrainian President Viktor
Yushchenko demanded that Prime Minister Yulia Tymoshenko's government
pay this debt within five days. Yushchenko linked the price of gas to
the price that Russia pays for its lease for keeping the Black Sea Fleet
in Sevastopol. Yushchenko also called for a review of transit fees
Gazprom pays to transport Russian gas to Europe via Ukraine and the fees
for underground gas storage facilities in Ukraine.

Yushchenko did not miss this opportunity once again to mix domestic
politics with the continuing gas-price conflict by accusing his
opponent, Prime Minister Yulia Tymoshenko, of responsibility for the
debt (although he was the only Ukrainian official to make such an
accusation). "You are to take personal blame for this," Yushchenko
angrily stated, adding that the Cabinet of Ministers' lack of
professionalism in gas procurement was leading to the "colonization of
the state" (Kommersant, November 22).

Tymoshenko, who was visiting Sweden, responded to Yushchenko's charges
by stating that the alleged sum was not a Ukrainian state debt to
Gazprom but was, in fact, owed by the shady Swiss middleman company,
RosUkrEnergo (Kommersant, November 22).

In what some interpret as an attack on Yushchenko, Alexei Miller, and
Dmitry Medvedev, Tymoshenko added: "I believe that it is necessary to
end corruption in the gas sector and not burden the government with
other questions. I think that our government will end corruption in the
gas sector and will begin to sign direct, transparent contracts"
(Kommersant, November 22).

Soon after Tymoshenko's rebuttal, Naftohaz Ukrainy issued its own
statement: "The Company underlines the fact that it has no debt to OAO
Gazprom and calls on politicians and experts to stop speculating about
this question. Naftohaz's debt to RosUkrEnergo for gas used in 2008 is
$1.267 billion" (Kommersant, November 22).

The Ukrainian weekly Zerkalo Tyzhnia, however, reported on November 22
that sources in Naftohaz said that the company's debt to RUE was in the
order of $2.25 billion, which included late payment penalties of $250
million.

In late 2007 Naftohaz signed a contract for 2008 purchases with
RosUkrEnergo and not Gazpromexport, a subsidiary of Gazprom responsible
for marketing gas. According to the scheme, Gazpromexport buys gas from
Central Asia and resells it to RUE, which sells it to Naftohaz on the
Russian-Ukrainian border. RUE, in turn, is obligated to repay
Gazpromexport for the gas delivered to Ukraine. The confusion in this
opaque scheme stems from the fact that RUE is 50 percent owned by
Gazprom. Alexander Medvedev, the deputy head of Gazprom and head of
Gazpromexport, is also a member of the RUE coordination committee, so
Medvedev in fact winds up selling and buying to and from himself.

Since coming to power, Yulia Tymoshenko has been determined to cut RUE
out of the Central Asian gas supply chain and sign normal long-term,
take or pay contracts directly with Gazprom. At her meeting with
Vladimir Putin in October, an agreement was signed that held out the
prospect for such a normalization of economic relations. The key passage
of the agreement reads: "The Parties acknowledge that the efficiency of
the transition to direct relations in gas shipment depends on the
settlement of the debt to Gazprom OJSC for natural gas supplied to
Ukrainian consumers" (Ukrayinska Pravda, October 4).

It appears that Gazprom and the Kremlin, along with the Ukrainian "gas
lobby," which is reputed to be close to both Viktor Yanukovych, the
leader of the pro-Russian Party of Regions, and to Viktor Yushchenko,
want to prevent RUE's removal and avoid long-term contracts, hence the
Russian claim that the Ukrainian debt is to Gazprom and not RUE so until
it is settled, RUE will remain the middleman.

Tymoshenko is also aware that Yushchenko's threat to increase prices for
underground gas storage in Ukraine would have a disastrous impact, not
only on Gazprom and RUE, but above all on Naftohaz Ukrainy. The current
price for storing gas in Ukraine is $6.68 for 1,000 cubic meters. In
Germany the cost is $82.50. Two-thirds of the gas stored in these
underground caverns, however, belongs to Naftohaz. If the Ukrainian
government were to raise its storage tariff to half the German level,
the financial impact on the state-owned company would be crushing.

As January 2009 rapidly approaches, Gazprom's European customers will be
closely monitoring developments on the Ukrainian-Russian gas front. The
January 2006 cutoff of gas to Ukraine, in which RUE played a critical
role, had a greater impact on European customers than on Ukraine. The
possibility of having a highly suspect scheme, allegedly linked to
organized crime, maintain such a powerful hold on gas supplies to Europe
should be of concern to European leaders.

-Roman Kupchinsky

 

Radio Free Europe/Radio Liberty
November 25, 2008 

Ukraine, Gazprom, Gas, (And The Usual Debts And Threats) 

Like clockwork, when the frosts and first snows arrive in Ukraine,
Gazprom starts talking about Ukraine's gas debts. The debts become
veiled threats, then the veil slowly comes off and the Russians turn the
gas off. As they once did in 2006, terrifying Europe more so than
Ukrainians, who somehow always manage to find ways of keeping warm.

As always, the debt is in the billions. Gazprom says it is $2.4 billion.
Naftohaz, the Ukrainian state gas company, claims the debt is much
smaller, $1.3 billion, and furthermore the money is not owed directly to
Gazprom but to the notoriously secretive intermediary company
RosUkrEnergo, 50 percent of which is owned directly by Gazprom. 

Ukrainian President Viktor Yushchenko promptly turned to his Prime
Minister Yulia Tymoshenko and instructed her to clear up the gas issue
within five days. She, no less promptly, dispatched a delegation for
talks to Moscow.

Ukrainian-Russian gas relations are opaque and deeply mysterious. No one
seems to know what kind of contracts are drawn up, for how long a
period, and under what terms. The only certainty in these relations is
the regularity of payment and debt conflicts. 

The "Kommersant Ukrayina" newspaper writes that during recent gas talks
between Gazprom and Naftohaz, the Russian side suggested that Ukraine
waive its gas-transit fees across its territory for the next 14 months
in lieu of the existing debt.

Now, Russia is threatening to take Ukraine to court over this latest
"debt." Tymoshenko is hoping for a one-or two-month extension on the
payment. She's also reassured her fellow Ukrainians that no one would go
cold this winter. Currently, Ukraine has a record 17.5 billion cubic
meters of gas in its repositories. That's a lot of gas.

Gas prices are historically indexed to the price of oil. Oil has fallen
from $150 a barrel in July to well below $50. Gas prices, however, have
not budged. 

Gazprom boss Aleksei Miller even forecasts that gas prices will hit
record highs within the next three years. He did, however, pledge that
in the first half of 2009, gas prices will decrease. Maybe that will
bring down Ukraine's debt next year. Because you can certainly count on
there being a debt.

-- Irene Chalupa 


 


(Note:  Make sure to read the following article in its entirety, not
just the headline, which can leave the impression that a final gas debt
deal has been struck.  It hasn't)


AP


Gazprom Reaches Gas Debt Deal with Ukraine

November 25, 2008

 

Moscow - Ukraine's state gas company Naftogaz agreed Tuesday to pay part
of its debt to Russian gas monopoly Gazprom by the end of the month,
both companies said.

Naftogaz agreed to pay for September gas supplies and part of the debt
for the October shipments by Monday, the companies said.

But Gazprom said it is sticking to its decision not to sign a contract
for future gas supplies until Ukraine pays off its entire $2.4 billion
debt for September, October and November shipments.

Talks on future supplies will resume after the partial payment is made,
Gazprom said.

Ukrainian officials rushed to Moscow earlier this week after Gazprom
warned that it could cut off gas supplies to Ukraine on Jan. 1 unless a
new contract was signed.

Uncertainty regarding Russian gas supplies to Ukraine raises concern in
European countries that receive gas from Russia via pipelines that cross
Ukraine. A similar conflict led to drops in gas supplies in Europe in
January 2006.

Ukrainian officials have said that the debt actually amounts to $1.3
billion for supplies received in September and October.

But Gazprom spokesman Sergei Kupriyanov said in televised comments on
Tuesday that the two companies agree on the amount of the debt. "We
truly have a common opinion regarding who owes whom - and how much," he
said. Naftogaz spokesman Valentyn Zemlyansky, however, denied that the
two countries agreed on how much was owed. "The figure of the debt has
not been established," he told The Associated Press in Kiev. 

 

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