Posted on 01/21/2006 12:23:43 PM PST by Tailgunner Joe
The war between Russia and Ukraine about natural gas is over, but this is not the end of the drama.
Already fires up a bluish light of the new conflict – except this time, the conflict is Ukraine vs. Ukraine. The opposition is serious and determined to prove that Victor Yushchenko, Yuriy Yekhanurov and Co. did not win at all (as is perceived by many), but instead embarrassingly lost [the recent Russia-Ukraine energy conflict]. And consequently, they deserve obstruction, ostracism and a full defeat at the March parliamentary elections.
Yesterday’s enemies – Yulia Tymoshenko and Inna Bohoslovska, Natalya Vitrenko and Oleksandr Moroz – united in a “holy” attack against Ukraine’s gas victory. For Yekhnurov’s cabinet there is an immediate dismissal and for the president – a speedy impeachment is threatened.
The highest achievement of this polit-technological fantasy ought to be recognized an offer by the Block of Yulia Tymoshenko to cancel the recent natural gas agreement at the Pecherskiy Regional Court.
If that is how things will continue to evolve, we may smell the gas burning at the Maidan; and on Kyiv’s streets, we may witness thousands of opponents with broken pieces of Gazprom’s natural gas pipes held in skillful and hardworking hands.
Actually, the opposition’s logic is clear. If you cannot jump on the victory wagon, you must declare it “the wagon of extreme failure.” In all, it is suggested to disregard Ukraine’s victory while those responsible for the success ought to be turned over to the people’s court.
The history of world democracy teaches us that voters are, unfortunately, too trusting; and, often a pretty picture wins over clever arguments and sound evidence. Thus there is a need to figure out and receive a pure, like a freshly made Moonshine, answer to the question: who won the short cold Great Natural Gas War of 2005-2006?
Unquestionably, Ukraine won. Also won our dear friends V.A. Yushchenko and PM Y.I. Yekhanurov.
First of all, the price of $95 per 1000 cubic meters is a pretty good result especially after taking into consideration the nauseating comment made by Moscow that the minimum price will be $230.
Several professionals at the Gazprom were expecting the price to drop from $230 to $145, but then Putin intervened and Ukraine got a price that was $50 less than the one which the Gazprom was claiming. Needless to say, the Gazprom folks were not too happy.
At $95 and transit fees tripled, Ukraine will be able to keep the lowest European tariff for its population.
With all their flaws, why were Yushchenko-Yekhanurov able to quickly receive victory? This is because the two correctly understood the philosophy of the war.
In this conflict, Ukraine as the nation-state faced not the grand Imperial Russia, but a small band of thuggish businessmen headed by Putin and always concerned with one and always burning problem: how to transfer Russia’s economic or political resources into personal offshore accounts.
Such people can only be spoken to with a language they understand. In our case, there was a need to suggest a corrupt offer which would reflect private interests. The correct numbers in the proper accounts appeared, and RusUkrEnergo was born.
Dresdner Bank, an ultra Putin friendly organization, will acquire from Gazprom one-half of RusUkrEnergo. The second-half is owned by Raiffeisen Investment S. A. of Switzerland.
Yushchenko, Yekhanurov and their friends in arms correctly assessed the opponent and made him an offer he could not refuse. The end result is that RusUkrEnergo will be supplying Ukraine its natural gas.
It is not difficult to calculate that 34 billion of cubic meters of Russia-Turk-Uzbek natural gas cocktail (Gazprom = $230 and Central Asian natural gas = $65) will cost the Switzerland’s partner $1.67 billions per year.
But of course, behind the scenes and under the mahogany table of negotiations, these costs will be compensated. The tsarist owners of RusUkrEnergo will end up earning around $2.3 billions per year.
How do you mean? Very simply.
RusUkrEnergo will receive from Gazprom a couple of dozens of Central Asian gas at the price of $65 per 1000 cubic meters. It will then turn around and sell this heavily discounted but valuable natural resource to the Western Europe for around $250-$270. The difference of some meager 4 billion dollars will be given NOT to the Russian state.
What is created is a genius scheme of its kind: Gazprom spends $1.67 billions in Ukraine’s favor and then $2.3 billions on Russian (some Finnish and Israeli) individuals.
This arrangement is very favorable for Ukraine. And very not favorable for Russia – as a state. But as to the latter, a simple Russian citizen will not become aware. Should he find out then the most honest in the world Russian State Television will explain: everything that Vladimir Putin stole from the state was stolen for the benefit of the country and in the name of national interests of the Grand Russia as she rises from her knees.
Was there a smarter alternative to the above arrangement? No, not at all.
The usual logical arguments that Ukraine and Russia ought to be dealing directly with one another and without a middle man strike a painful note to the supplier, in this case the current Russian governing elite.
It is a sort of an intellectual reasoning: if…then. If there is no middle man then there is no theft. And when there is no theft then Putin becomes bored as when watching a poorly made Western. Without a middle man, Ukraine would have had to pay $160 and no questions asked. Therefore, however criminal and terrible RosUkrEnergo company may be, for Ukraine as a state, this company fared well. Others will answer before God for Russia and her lost money.
“The Tymoshenko Plan,” as secretive as it was marvelous, proposed a solution similar to RosUkrEnergo with only two amendments:
-- the middle man under the “Tymoshenko Plan” was supposed to be an offshore company “Itera” based in the U.S. and known to be friendly with Yulia Volodymyrivna for a couple of years now.
-- the natural gas in the end would have cost a little bit more, closer to $115-120; although “Iter” does have good relations with Turkmenistan, its Gazprom contacts are further away than those of RosUkrEnergo.
The sad result for “Iter” is obvious. It will not be returning back to Ukraine’s market thanks to Yushchenko-Yekhanurov solution of the natural gas crisis. However, the problems of “Iter” are not enough to leave Ukraine without the natural gas by utilizing the court system and expensive lawyers.
As to the numerous talking-heads proclaiming “Russia’s Victory,” those ought to be ignored. If the party says so, those same people will praise Chinese immigration or a meteorite’s devastation of Moscow.
For the Putin’s cat, the most important task of this year is to will for a magic disappearance of those four billion dollars from the balance sheets.
The Kremlin went so far as to activate the dormant Mother Vitrenko in order to show to the Russian people that: look Ukrainians are not happy, therefore WE won and THEY lost.
The sudden resolution of the conflict was a slap on the face to the last year’s losers and today’s opposition. After all, the conflict provided fertile election year campaign ground. There were many expectations and hopes that Yushchenko just might slip to fall on this one and then…
But having won the first war, Yushchenko may lose the second.
After all, the president is a type of person who occasionally and not always by accident lets the victory slide through his fingers. A nice exception was the Orange revolution. Will this exception repeat itself on March 26th and will it become the rule, we will know soon enough.
And while the second war has not reached its peak, there exist all grounds to congratulate the Ukrainian government with success of the previous war. The celebration of victory should be understood as one government beating a commercial structure which due to a historical accident carries the name – “Russia.”
Just Damn!!!
The Ukaranians have been reading the Democrat play book!
ping
And lets not forget that the "market price" in Russia is $15 vs the $240 that Putie committed blackmail for.
Ukrainians need to be calm and avoid being excited into any large, physical, hasty moves for a few months. But a few non-physical attacks against pride along with a build-up of physical defense might be alright.
The Russian-Ukrainian gas compromise
The Centre for Eastern Studies ^
Posted on 01/19/2006 8:20:00 AM CST by Lukasz
http://www.freerepublic.com/focus/f-news/1560913/posts
On 4 January, Ukraine and Russia reached a compromise that ended their prolonged gas dispute. Financially, the agreement is beneficial for both sides, although Ukraine has managed to win more for itself: Gazprom will sell gas to Kiev through its daughter company RosUkrEnergo at US$95 per 1000 m3, i.e. at nearly twice last year's price, but the price is still much lower than what the Russian monopoly had tried to impose during the conflict (the price quoted by the Russians then was US$230 per 1000 m3). The information that Gazprom would sell gas to RosUkrEnergo at US$230 per 1000 m3 should be seen as a propaganda manoeuvre enabling Gazprom to end the conflict without losing face. The agreement that was reached will also generate profits for RosUkrEnergo, a company whose origins are not entirely clear, and which is probably linked to the Russian government elite and Ukrainian business circles.
The way in which the Russian-Ukrainian conflict developed clearly shows that the actual objectives pursued by the Russians went beyond their declared aim of 'gas trade liberalisation.' By using gas supplies as an instrument of pressure, Russia tried to ensure long-term economic and political domination in its relations with Ukraine. If these had indeed been Russia's objectives, the outcome of the conflict marks a failure of the Russian strategy.
(snip)
Looks like both sides have a long way to go. It is not easy to work together for two peoples that for so long have had their quarrels to put it lightly.
BUMP!
RUSSIA TURNING TO ENTRAPMENT WITH SATELLITE STATES
The Kremlin is using Gazprom and other monopolies to take over key
industries and institutions in the former Soviet republics
ANALYSIS & COMMENTARY: By Vladimer Papava and Frederick Starr
Taipei Times, Taipei City, Taiwan, Friday, January 20, 2006, Page 9
Russia's use of natural gas to exert economic and political pressure on
Ukraine has caused grave concern in the West. But Russia's pressure on
Georgia has been even heavier -- and has scarcely been noticed.
In Georgia, as in Ukraine, Russian President Vladimir Putin seeks to
implement the doctrine of a "liberal empire" put forward in October 2003
by Anatoli Chubais, the chairman of United Energy System (RAO UES),
Russia's energy monopoly.
According to Chubais, Russia will never find a place in either NATO or
the EU, so it must create an alternative to both, a new empire of its own.
It can do this by using its huge and rich public-private monopolies to take
over the key industries and economic institutions of former Soviet
republics, thereby laying the groundwork for political domination. The
resulting empire will be liberal, according to Chubais's definition, because
it can be built with money rather than tanks.
[1] Russia's first step in fulfilling this plan in the South Caucasus was
directed against Armenia, its strategic partner in the region. Seizing on a
US$93 million debt that Armenia owed to Russia, the Putin administration
demanded payment in either cash or equity in Armenia's major industries.
Cash-strapped Armenia had no alternative but to hand over the shares,
which it did in a 2002 treaty candidly titled "Possessions in Exchange for
Debt" -- a reminder of the infamous "debt-for-equity" swaps of the Yeltsin
years (another Chubais invention), which spawned Russia's oligarchs.
[2] Russia's second step in rebuilding its empire in the Caucasus is to
unite itself and Armenia in a single economic zone. Because Georgia stands
directly in the geographical path to realizing this goal, Russia had to deal
with it first. In the 1990s, it used crude political pressure to bring
Georgia into line, but it shifted to economic leverage in 2003.
When US-based AES Silk Road failed to transform Georgia's energy system,
Chubais's RAO UES bought AES's holdings and other assets that amounted
to 75 percent of the country's electricity network.
[3] Then came Georgia's "Rose Revolution." Many state-owned firms were
privatized for 10 times the sums yielded in asset sales under the previous
government of Edvard Shevardnadze.
But an utter lack of transparency allowed Russian companies, and their
subsidiaries registered in third countries, to snap up most of the new
offerings. Typical was the Russian holding company Promyslennye
Investory (Industrial Investors), which managed to get a major gold
mine and then half of a plant producing gold alloys.
Russia's main foreign policy instrument in Georgia is Gazprom, the
state-controlled gas monopoly. Gazprom's aim is to control not only the
gas industry in Georgia, but also the only pipeline that feeds Russian gas
to both Georgia and Armenia. Had the US not intervened last year with
US$49.5 million to rehabilitate the pipeline, it would have ended up in
Gazprom's hands.
Even then, pressure from Moscow may result in joint Russian-Georgian
control of the pipeline, if not its outright sale to Gazprom. The Georgian
government, without clear support from the West, may yet agree to such a
deal, something that Moldova, which saw its gas cut off on Jan. 1, has just
done.
Gazprom is not the only state entity carrying out Russian policy in the
South Caucasus. In 2004, Russia's state-owned Vneshtorgbank acquired a
controlling stake in Armenia's Armsberbank.
The following year, Vneshtorgbank purchased a controlling stake in the
privatized United Georgian Bank, Georgia's third largest. In effect,
Vneshtorgbank renationalized United Georgian Bank, but the new owner
was the Russian state.
Recently, Chubais's RAO UES has had the lead role in integrating Georgia
into Russia's "liberal empire." When the Georgian authorities announced
plans to privatize the Inguri Power Plant and renew construction of the
long-stalled Khudoni Power Plant, slated to become Georgia's largest,
RAO UES immediately began staking out a dominant role for itself in both
projects.
The combination of massive pressure from the Russian side and silence
from the West could leave Georgia's entire power system -- both gas and
electricity -- in Russian hands.
Russia's scheme to rehabilitate the rail line from its territory into the
secessionist Georgian province of Abkhazia similarly mixes economics with
neo-imperial aspirations. Even though it is focused on land that the UN
recognizes as part of Georgia, the main beneficiaries of this project would
be Russia and Armenia.
If the international community allows this scheme to go forward, it will
have endorsed Russia's effort to separate Abkhazia from Georgia. Parallel
with this, Russia and Armenia are planning a new rail link to Iran.
Besides its obvious benefits to Iranian President Mahmoud Ahmadinejad's
retrograde government, this will deftly weaken the South Caucasus' links
with the West, which the US and Europe have spent a decade fostering.
Thus, Russia's effort to entrap Georgia and its neighbors in the nets of its
new "liberal empire" is part of a well coordinated attempt to reorient the
South Caucasus as a whole towards the anti-Western coalition of Russia
and Iran.
Western countries, and the US in particular, must provide firm backing and
support to the South Caucasus to prevent Russia from realizing its
destabilizing and dangerous neo-imperial dream. -30-
Russian newspaper "Novaya gazeta" (New newspaper) dated Jan.16 of 1006 has published article written Roman Shleynov "Presidents and their surroundings, control selling oil and gas personally".
If somebody can read in Russian go to: http://www.compromat.ru/main/miller/rosukrenergoshema.htm
and try to understand very complex ties between companies and people whith partnership former KGB-officers, Silvio Berluscony's friend Bruno M. Granelly, Ariel Sharon's son Gilad etc.
You can see " transparency" gas deal between Ukraine and Russia.
Excellent find.
Tell you what. When I first noticed the strategy engaged by the Putin's administration on the news source using oil to blackmail its neighbor, I felt the Putin administration was full of brainless diplomacy advisors, resulting in a strategy that isolated them from the west, and strengthening popularity of the Ukrainian President. I gave thanks to the advisors of dictator Putin for doing a good job to spit mud on Putin's face.
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