The results of the negotiations held in Moscow last Friday between Ukrainian and Russian Prime Ministers Viktor Yushchenko and Mikhail Kasianov were harshly received by the Ukrainian mass media. The Inter TV channel reported that the negotiations ended in “complete failure if not defeat.” However, the leaders of the two governments announce that during the course of the negotiations they came to agreements that will be able to completely remove from the agenda the problem of unsanctioned siphoning of Russian natural gas by Ukraine. Perhaps this is the only, even from official point of view, success that can be discussed after Viktor Yushchenko’s visit to Moscow.
By November 30 when the summit of the CIS leaders in Minsk is scheduled, experts will prepare drafts for required documents, and before December 15, according to Mr. Kasianov, the parties will ratify documents fixing the agreements reached. This is why the forecasts for Ukraine do not appear overly too optimistic.
Hitherto our main achievement was that the Ukrainians assured Russia that Kyiv is going to take all steps necessary not to allow gas exports from Ukrainian territory. This will be done, Mr. Kasianov considers, through measures including economic ones, particularly by adopting a natural gas export duty up to the level that will make such exporting unattractive. In turn, Russia promised to provide transit of the Turkmenian gas via its territory to Ukraine.
In a very interesting interpretation an opportunity had been discussed of giving Ukraine more gas in addition to that provided for in the agreements and contracts to be signed for next year. “If Ukraine will have need for bigger volume of gas we will carry out additional deliveries which will be formulated as a state debt,” Mr. Kasianov said. In other words, further unsanctioned siphoning will be immediately chalked up to the national debt. Viktor Yushchenko in full understanding stressed that these agreements are aimed at solving the key problem of bilateral cooperation in the gas sphere, though he did not mention on what price Ukraine agreed to pay for the Russian gas sanctioned but over the amount previously agreed to. There is data according to which instead of $109 per one thousand cubic meters that was mentioned before Ukraine will be called to pay $240, and in case of belated current payment to pay off, in Inter’s opinion an impossible 15% a year.
Speaking about Ukraine’s gas balance for the next year, Mr. Yushchenko reported that supposedly 30-32 billion cu. m. of it will be covered by the cost of Russian gas transit, 30 billion by the costs of Turkmenian gas, and 18 billion by domestic output.
The second key problem of the Russo-Ukrainian relationship, gas debts, has not yet been solved. Although Russia suggested an eight year installment plan, Mr. Kasianov noted that the final decision on debts restructuring had not yet been made. Apparently, Viktor Yushchenko did not dare to concede Russia 51% of the Ukrainian gas transport system on his own, and smaller package will not satisfy the Russian side.
According to Mr. Kasianov, our states have different positions on the concrete scheme and form of debt restructuring. “We insist that this debt be formulated as a state debt while Ukraine sees other forms of its formalization,” Interfax Ukraine quotes the Russian premier. I was impossible to come to terms on the size of Ukraine’s total gas debt. Mr. Kasianov would not name it referring that this question had not been discussed in course of the meeting. Earlier Rem Viakhirev, head of Gazprom, proclaimed that the Ukrainian debt for gas delivered by Russia exceeds $2 billion. The Ukrainian side insists on a significantly smaller figure. Last Friday at a press conference in Moscow Yushchenko proclaimed that taking into account the basic and confirmed data including fines and penalties Ukrainian debt today is $1,362,000,000. They say that Yushchenko was hoping for a write-off of some part of this debt but Kasianov did not support this, the Russians insisted, and Yushchenko probably agreed that corporate. Debts be transferred into state debt. Simultaneously Ukraine is completely prohibited from exporting natural gas, including its own.
Naturally, Moscow is satisfied with the results of the negotiations. And Ukraine has something to think about.
