Ukraine loses its energy independence

Oct 24, 2001 02:00 AM

The head of the Parliamentary Budget Committee Oleksandr Turchynov has said that Ukraine is losing its energy independence due to concessions made to Russia in fuel transport corridors and the energy sector. He dismissed the view that Russia had made concessions to Ukraine in an agreement signed recently on restructuring Ukrainian gas debts.
Turchynov also argued that all the beneficial energy reforms conducted by the previous government led by Viktor Yushchenko have been rescinded by the current government. The following is the text of the interview with Turchynov in independent Lviv-based Ukrainian newspaper Vysokyy Zamok on 19 October:
The Ukrainian government has submitted the text of the inter- governmental agreement "On transportation of Russian gas through Ukrainian territory" to the Supreme Council, which contains a scheme to restructure the [national oil and gas] Naftohaz Ukrayiny company's state debts which accumulated in the last few years and now stand at $ 1.4 bn. Ukrainian Prime Minister Anatoliy Kinakh said that Ukraine recognized Russia as the leading energy supplier to Europe, so it [Ukraine] has promised to abstain from actions which could pose any threat to the implementation of this strategy.

Shortly after this, the government issued another resolution dismissing the national coordinator of Ukraine's participation in Eurasian transport corridor and the director of the Druzhba oil pipeline, Lyubomyr Bunyak, who has been supervising the construction of Odessa-Brody oil pipeline in the last few years. Bunyak is also an ardent supporter of Ukraine's commitment to its own transit potential.
Experts started talking about the chances for secret deals between top officials in Kiev and Kremlin regarding Ukraine's refusal from its intention to become a key link in the network bringing Asian energy sources to Europe in exchange for the restructuring of its debts for Russian gas and access for Ukrainian goods to Russian markets. This concerned, first and foremost, products manufactured at pipe plants controlled by Viktor Pinchuk, the common law son-in-law of President Kuchma.

We asked the head of the parliamentary budget committee and the deputy chairman of the Motherland Party, Oleksandr Turchynov, to explain the situation around these issues.

Question: How would you comment on Bunyak's dismissal and the recent appointment of the head of Ukrtransnafta, Oleksandr Todiychuk, to his post?

Answer: Ukrtransnafta is a monopoly which is aiming to collect significant amounts in both national and hard currencies and control them unilaterally.
Traditionally, in our country they create similar institutions under the supervision of the presidential administration on the eve of an election campaign, since it is right before the election that authorities need huge amounts of money. We remember how Naftohaz Ukrayiny was created prior to elections, but this institution has been accused of embezzlement and creating a $ 1.5 bn-debt to Russia for gas supplies. The same is happening with Ukrtransnafta now.

Question: Most officials have welcomed the settlement of Ukraine's gas debts to Russia. In their opinion, it was done by taking into account Ukraine's national interests. The Russian press has even written that it capitulated to official Kiev. Does it mean that Moscow really agreed to significant concessions?

Answer: No way. It would be absolutely uncommon for this country's ruling elite.
The matter is that on the eve of this winter they, in fact, rescinded all achievements gained by the Yushchenko government in energy sector, and when [Yuliya] Tymoshenko was deputy prime minister [for the fuel and energy sector]. The new government has shown its complete inability to cope with preparatory works for the sector's performance during the winter period. As usually happens in such cases, they are looking for a man who will face these issues.
In other words, they have adopted a strategic decision to build an energy scheme at Russia's expense, which envisages Ukraine's absolute dependence. Earlier, after consistent opposition from the Yushchenko government, the Kinakh government agreed to unite the Ukrainian and Russian energy systems. Step by step we are losing our energy and economic independence and turning into an appendage of its northern neighbour.

Question: What is your forecast as to parliament's possible ratification of the agreement between Russian and Ukrainian governments on the transportation of Russian gas through our territory and restructuring of gas debts?

Answer: I hope that the Supreme Council will support the idea of Ukraine having several sources for its energy supplies.
We cannot afford to be totally dependent on the Kremlin's will. In this case, the construction of the Odessa-Brody oil pipeline and the Odessa oil terminal lose their sense, as do talks about Ukraine's participation in transporting Caspian oil to Europe, and gas supplies not only from Russia, but also from other countries in Central Asia.
The Russian monopoly means our returning tothe situation which we had in Ukraine two or three years ago, before the Yushchenko-Tymoshenko government came and made serious steps to diversify energy sources. All of this will be completely undermined with our return to total energy dependence on Russian Federation, which would lead not only to economic, but also political dependence.

Source: BBC
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