The next round of talks aimed at reviewing the gas contracts signed in 2009 between Ukraine and Russia will take place in a week, on June 7. This time the negotiations will be held on a prime-ministerial level, as the previous meeting in Kyiv, of Ukrainian Energy Minister Yurii Boiko and the head of Russia’s Gazprom Aleksei Miller, was unsuccessful. Will we see a mutually beneficial decision this time? With winter creeping along Russia has most to gain from any delays. Ukraine’s goal is not to repeat the situation of 2009. This was discussed in detail last week on one of the channels with the participation of the former president Viktor Yushchenko. The conclusion: they have to work efficiently and coordinate their actions.
Obviously, Kyiv understands this, but diplomacy is the art of the possible, though Ukraine sometimes lacks this ability, as well as diplomatic courage. When discussing the upcoming talks Prime Minister Mykola Azarov simply said: “We’ll discuss the formula to reconsider these contracts.” Without going into details he reported that he signed a letter to his Russian counterpart in which he stated the main arguments and suggestions of Ukraine.
The Ukrainian president has been far more active. During his meeting with Aleksei Miller he not only described the gas contract signed in 2009 as being “incorrect for Ukraine,” but also remarked that Ukraine “has questions concerning both the base price and the formula. The formula used for Europe is unacceptable for Ukraine.” Yanukovych emphasized that the distance between Ukraine and Russia is significantly shorter than between Russia and Europe, and hinted at the lopsided nature of the Kharkiv accords. In general, he thinks that Ukraine’s price for Russian gas should be much lower than that of European countries. But Miller doesn’t understand any hints.
In his reply to Yanukovych he said: “Today I’m ready to discuss with you the tendencies on the market, the factors that influence it, and all the questions regarding our future cooperation in the gas sphere.”
Last Saturday the head of Gazprom reported this to President Dmitry Medvedev and was praised for his non-compliance. He also reported that: “During the meeting we discussed the possible new forms of cooperation that can take cooperation between Russia and Ukraine to a new level.” Ukrainian taxpayers would like more details and seem unenthusiastic about Gazprom’s plans to take over Naftohaz of Ukraine, just as they are leery of attempts to pull Ukraine into the Customs Union. Yet there is precious little information about the government’s plans, aside from their intention to boost Naftohaz’s finances (the other day the Cabinet decided to raise the authorized capital of Naftohaz by 3.5 billion hryvnias). However, this may simply be a ruse to strengthen their position during the upcoming reforms.
Meanwhile Europe is far from neutral in what concerns the Ukrainian-Russian talks on a gas price reduction. The South Stream will partially replace the existing gas-transport routes, claimed the CEO of South Stream AG Marcel Krammer during a presentation of the project in Brussels. That day Miller also confirmed that some 20 billion cubic meters of gas transported through Ukraine to the Czech Republic and Germany will soon be transported through the South Stream. The European Commission won’t impose any bureaucratic obstacles or normative requirements. He continued: “We realize the importance of the South Stream for both Russia and Europe as a means to diversify deliveries.” Are they trying to hustle Ukraine?
Isn’t this confirmed by the Russian president’s claims? “We have to stick to signed contracts. It concerns Russia, Gazprom, and our Ukrainian partners. All the appeals for unilateral actions have to meet the agreements.” “Secondly,” continued Medvedev, “Ukraine is not an unfamiliar and remote partner for us, but a very close, brotherly country experiencing a lot of economic problems. President Yanukovych and I agreed about the developed forms of cooperation in the future, including cooperation in the gas sector.” “That is why,” the Russian president encouraged Miller, “[you should] keep in touch with your partners and your colleagues.”
