Books on Ukraine
Update No: 304 - (02/05/06)
Ukrainian CEC has announced official outcomes of
On April 10th, Chairman of Ukrainian CEC Yaroslav Davydovich announced the final
outcome of the March 26th parliamentary elections.
The Regions Party of pro-Russian Victor Yakunovich received 32.14% of the votes,
the Bloc of Yulia Timoshenko - 22.29%, the pro-presidential Our Ukraine Bloc -
13.95%, the Socialist Party - 5.69%, the Communist Party - 3.66%.
Thus, the Regions Party received 186 out of 450 seats at the Ukrainian Supreme
Rada, the Bloc of Yulia Timoshenko - 129, Our Ukraine Bloc - 81, Socialist Party
- 33, Communist Party - 21, while other parties have failed to overcome the 3%
barrier, which it is necessary to surmount to enter parliament.
There is still no coalition, however, ready to form a government.
Patching rifts for Ukraine coalition
Ukrainian President Viktor Yushchenko and his former Orange revolution partner
Yuliya Tymoshenko started discussions April 6th over forming a coalition
government two days after the vote count was certified, but immediately
The Ukraine parliament (Verkhovna Rada) rejected a proposal on April 4th for a
recount of votes from the March 26th parliamentary elections, and recognized the
results. Several unsuccessful candidates had urged the Central Election
Commission (CEC) to have a recount.
Yushchenko, whose Our Ukraine party garnered 14 per cent of the vote and came in
a disappointing third place, didn't support the recount call. He tried to avoid
the embarrassment of his party's poor showing by standing behind the generally
well-received elections as a triumph for Ukrainian democracy, the Associated
Press reported, (see also below, where we give an article by him in full).
CEC chairman Yaroslav Davydovich acknowledged that there were some election
irregularities, but not enough to be able to say that vote rigging took place.
He categorized calls for a recount as "political statements from
losers," according to official Russian news agency Itar-Tass.
With the vote tally certified but no clear winner, the Ukrainian president faced
a tough choice between two of his main political rivals. The Our Ukraine party
was in a position to determine the shape of the new government by joining a
coalition with one of the two leading parties. Its 81 seats could have helped
form a solid majority in a coalition with the winner of the elections, the
pro-Russian Party of Regions. Or, it was in a position to repair its estranged
relationship with the Yuliya Tymoshenko Bloc in an effort to form a three-party
coalition including the Socialist Party of Ukraine.
The second-place finisher, the Yuliya Tymoshenko Bloc, is led by
Yushchenko's closest ally during the Orange Revolution that launched him to
power in 2004. But their relationship became strained after Yushchenko dismissed
Tymoshenko from her post as prime minister in September.
The premiership ambitions of Yulia Timoshenko do not make it possible to create
an "orange coalition" and to form a government. "There will be no
'orange coalition,' if Yulia Timoshenko does not give up her claim to the post
of prime minister," said Igor Zhdanov, first deputy head of the executive
committee of Our Ukraine Party.
As a result, the prospect of the unification of pro-presidential Our Ukraine and
the Party of Regions led by Viktor Yanukovich, which have been irreconcilable
rivals so far, looks ever more realistic.
Representatives of the Socialist Party, the Timoshenko Bloc and Our Ukraine
signed a protocol on the formation of an "orange" parliamentary
coalition on April 13. On the next day, however, the political council of Our
Ukraine decided to remove from the protocol the item, which guaranteed the
appointment of Timoshenko to the post of prime minister. Timoshenko urged Our
Ukraine to reconsider the decision, which she regards as the denunciation of the
April 13 agreements.
Prime Minister Yuri Yekhanurov, who tops the list of Our Ukraine, made it clear
that the appointment of Timoshenko to the post of prime minister could bring
about another round of confrontation in the country. "I wish she showed us
their programme. We want to know what we are signing. What is in store for us -
more confrontation?" he said in a live programme of the "1+1" TV
channel on April 19th.
Yekhanurov urged the creation of a broader coalition, which would include the
Party of Regions - the winner of the elections. "I favour a broad
coalition. I think if one regards the whole of Ukraine - the South and the
North, the West and the East, one will view the situation in a different
way," Yekhanurov said.
Timoshenko said that President Viktor Yushchenko had agreed already to the
creation of a coalition in the new parliament between Our Ukraine and the Party
of Regions. She referred to the information, received from a high-ranking
representative of the pro-presidential bloc. "The agreement in principle on
the creation of a so-called broad coalition has been reached," she
announced. In her opinion, the agreement discredits the plan of the creation of
an "orange coalition" and undermines agreements on the distribution of
Timoshenko said her bloc would do its best for the creation of the "orange
coalition" made up of three political forces, and urged Yushchenko to head
the negotiations "Yushchenko should work personally with the three
political forces, so that they will sign the coalition agreement as soon as
possible," she said. It remains unclear whether or not she is ready to give
up her claim to the post of prime minister for the sake of the "orange
Zhdanov from Our Ukraine also believes that the coalition should be made up only
of "orange" political forces, and should not include the Party of
Regions. "There is no other format, we do not see it. No talks are being
held with the party of Viktor Yanukovich," he stressed.
By all appearances, however, the problem of the make-up of the future coalition
still remains to be resolved, and confusion reigns supreme.
Bad for business
Oksana Shuliar, an analyst at the Institute of Euro-Atlantic Cooperation, a
think tank in Kiev, said that talk of another Tymoshenko premiership could scare
away foreign investment. "Many British experts have expressed their concern
that Tymoshenko's premiership will cause a very big flight of investment from
Ukraine," Shuliar said. "Investors might start doubting whether to
invest in Ukraine, as Tymoshenko's premiership was marked by calls for creating
stricter rules for privatisation."
Shuliar said that for investment, a Yushchenko-Yanukovych alliance made more
sense. But such a convergence would have marked a return to the past, as it
would serve to unite business and politics - the separation of which was one of
the main aims of the Orange Revolution.
"There were many calls [during the Orange Revolution] to make a clear
division between the authorities and business. But in the case of this grand
coalition - the one between the Party of Regions and Our Ukraine - there [would
have been] no division between the authority and business," Shuliar said.
Stanovaya said there was no third option, as a coalition between the Party of
Regions and the Yuliya Tymoshenko Bloc is out of the question. Stanovaya says
Tymoshenko has characterized Yanukovych as an evil force in the hands of the
Kremlin, while Yanukovych has described Tymoshenko as unpredictable and too
This is an edited version of a story published by Radio Free Europe/ Radio
Liberty with other wire sources that came out in Czech Business Weekly.
No prospects for "orange coalition" in parliament - opinion
The coalition of democratic forces ("the orange coalition") will
have no political prospects in new Ukrainian parliament, holds Vladislav Kaskiv,
the Ukrainian president's adviser.
"Political formations, such as Yulia Timoshenko bloc and Our Ukraine will
not exist by autumn, and there will be a spate of smaller political forces
instead," Kaskiv told a news conference on April 17th, reported Itar-Tass
on the same day.
"People who formed the election bloc and received deputies' mandates had no
common ideology and no common vision of the country's development. They rallied
because of the common interest to get into parliament, no more, no less,"
He believes that "even if a formal coalition emerges now, it will have no
political prospects." He holds that "the logic of the so-called orange
vs blue standoff (between the Yushchenko team and the Party of Regions of Viktor
Yanukovich - Itar-Tass) was that of political technology in the framework of the
election campaign." "This was a technology for preserving and using
the fact of the standoff and getting more deputies' mandates," Kaskiv said.
A number of other experts share this view. They believe the coalition consisting
of Yulia Timoshenko bloc, the Socialist Party and the pro-presidential Our
Ukraine will not be a durable coalition without the Party of Regions that won
the March 26th parliamentary election. But the Party of Regions is short of 40
seats for forming parliamentary majority, which is 226 deputies out of the 450,
and the Party of Regions is not invited to the "orange coalition" so
Yushchenko: Putin's visit to Ukraine will promote settling of many issues
Russia and Ukraine are bound eventually to get on, willy-nilly. They need
each other too much. But there can be many a hiccup on the way.
Ukrainian President Viktor Yushchenko believes that the process of settling the
issues concerning deployment of the Russian Black-Sea Fleet in Ukrainian
territory will gain a constructive meaning after finalizing the parliamentary
elections and a visit of Russian President Vladimir Putin to Ukraine. The
Ukrainian president made the statement at a news conference on April 12th.
"I am sure that after the election campaign in Ukraine is finalized and
Vladimir Putin comes to Ukraine on an official visit, these issues will gain
detailed and substantial meaning," the Ukrainian president is quoted as
According to the Ukrainian leader, the visit of the Russian president will
promote a settling of issues concerning 170 ground areas, 130-150 real estate
objects, about 140 navigation facilities in Crimea used by the Russian Black-Sea
Fleet. Yushchenko also expressed hope for the solution of issues concerning the
usage of Ukrainian radio frequencies by the Russian fleet and Russia's paying
for rent of two Ukrainian radio-location systems.
The Ukraine's president stressed, provisionally, the date of the visit was set
for late April - May taking into account finalizing of election procedures in
Ukraine. Yushchenko also announced: "I believe that our meeting with the
Russian president will be a historical one, a significant one; it will pave the
way for solving many problems concerning economic cooperation in power
engineering, military cooperation, investments, a separate block will be
Ukraine's integration into the Eastern market."
Ukrainian president calls for the establishment of a Putin-Yushchenko
On April 13th, President Yushchenko received the Russian Ambassador to
Ukraine, Viktor Chernomyrdin, a key player behind the scenes if ever there was
one, a former premier of Russia and a man with the full confidence of Putin,
widely known by reason of a former job, chairmanship of the largest gas company
in the world, by the sobriquet 'Mr Gazprom' and perhaps the richest man in
They discussed the outcome of the parliamentary elections in Ukraine, as well as
economic and trade cooperation between the two countries. In particular, the
subject of establishing a Single Economic Space in the territory of Russia,
Belarus, Ukraine, and Kazakstan was "touched upon." The issue is
debatable, as the Ukrainian party, contrary to its partners, is not ready yet to
sign the basic package of agreements allowing the start of the Single Economic
Besides, one of the subjects at the meeting was the preparation of the visit of
the Russian president to Ukraine. Yushchenko has spoken out for the
establishment of a perpetual intergovernmental Putin-Yushchenko commission. The
idea is obviously designed to avert the sort of friction that accompanied recent
electoral events, the shut-off of gas to Ukraine in early January as a petulant
response to untoward developments in the political sphere.
The murky world of gas
Two influential Ukrainian businessmen were named on April 26th as the owners
of a one-half stake in RosUkrEnergo, a mysterious company that controls
Ukraine's natural gas imports. Citing audit documents, the newspaper Izvestia
said Dmitry Firtash - who has in the past played a role in importing natural gas
from Turkmenistan to Ukraine and owns a Kiev basketball club - and Ivan Fursin,
a banker, were the beneficial owners of the 50-percent stake.
Raiffeisen Zentralbank in Austria confirmed the names, saying it was holding the
stake on their behalf. In an e-mailed statement, the bank said Centragas
Holding, a company based in Vienna, "is a joint owner of RosUkrEnergo."
Russia's state-controlled monopoly Gazprom owns the other 50 percent of
Firtash owns 90 percent of Centragas and Fursin holds the other 10 percent, the
statement said. Raiffeisen said in the past that it held the stake as trustee,
but declined to disclose the names of the owners.
The disclosures come as concern is growing that Ukraine, which is the transit
route for 80 percent of Russia's natural gas exports to Europe, was tolerating
opaque deals, even after the "Orange Revolution" of 2004, that
jeopardize regional energy security. Suspicion has even fallen on Yushchenko,
whom some say is implicated.
RosUkrEnergo bounced into the public eye when it was named as the go-between in
a deal to resolve a natural gas pricing dispute between Russia and Ukraine that
interrupted supplies to Europe over the New Year. The U.S. Justice Department's
organized crime section reportedly opened a probe into RosUkrEnergo, with
diplomatic and financial sources saying that Raiffeisen had cooperated by
providing information on the company.
Izvestia, which is owned by Gazprom, published extracts from an audit report by
PricewaterhouseCoopers that named the two men as owners of Centragas.
Ukraine's energy minister, Ivan Plachkov, was quoted by Interfax- Ukraine news
agency as saying that Kiev may review the natural gas deal made in January
because of the revelations.
RosUkrEnergo's sales in 2005 were around US$3.5 billion and it made profits of
US$500 million from the sale of about 40 billion cubic meters of gas, Raiffeisen
has said. That makes it one of Europe's largest natural gas marketers.
Ukraine's state energy company, Naftogaz, is struggling to pay for natural gas
imports after the January deal, under which the import price Ukraine must pay
nearly doubled to US$95 per 1,000 cubic meters. Naftogaz has been unable to pass
on the natural gas price increase to consumers and, according to local media
reports, ran up losses of at least US$500 million in the first quarter of 2006.
An article can be interesting for what it says and for who is saying it. The
following text by the president of Ukraine is interesting on both counts and for
where it appeared, The Wall Street Journal Europe of April 3rd:-
A New Era for Ukraine
By VIKTOR YUSHCHENKO
KIEV -- Freedom triumphed in Ukraine a week ago as citizens voted in elections
that international poll monitors judged to be democratic and fair -- not a given
for a land that was once part of the Soviet Union. Regardless of the
configuration of the next government, the result underscores that Ukraine's
course of Euro-Atlantic integration remains on track.
One cannot help but wonder how our history might have been different had the
Orange Revolution come a little earlier. My country's return to normalcy is the
result of a number of important policies we have implemented since those fateful
days in the fall of 2004.
First, we ended government censorship, unleashing rigorous and free media, which
for the first time presented all the different political points of view and gave
equal airtime to government and opposition candidates. This true competition
between the parties sparked tremendous interest among the public, prompting
two-thirds of registered voters to participate in the elections.
Second, the campaign and elections were conducted in an environment free of
intimidation, fear and outright voter manipulation. This has not always been the
case. In the past, candidates were being followed and harassed by police and
secret service officials. Phones were tapped and family members of politicians
In the aftermath of the 2004 presidential election, more than 5,000 officials
were prosecuted for falsifying election results. This time, there were strict
controls to prevent election officials from abusing their powers. Parties were
free to organize rallies and community gatherings without government
interference. Law enforcement agents kept the peace and encouraged people to
report troublemakers. The entire election process demonstrated an unwavering
commitment to democratic values and respect for civil rights.
This election completes Ukraine's post-Soviet transition. We begin a new chapter
in parliamentary democracy and local self-government. Changes to our
constitution took effect three months ago, shifting some executive powers, such
as nominating the prime minister, from the presidency to parliament. The essence
of these changes is political power-sharing, requiring closer interaction
between citizens, parties and government. The new coalition government must be
formed two months after the official results are confirmed. Within my
constitutional powers as president and commander-in-chief, I will appoint the
ministers of foreign affairs and defense.
During discussions with the election winners last week, I suggested that
lawmakers must now put aside their narrow political interests and campaign
rhetoric and strive to unify the country. Cultural, religious and linguistic
differences have no place on the political agenda. Similarly, federalism and
special economic privileges will narrow and not strengthen Ukraine's economic
opportunities and competitiveness. To this end, I'd like to see a
"stability pact" signed by all parliamentary forces, outlining the
general principles of national unity. The harmonious regional and socio-economic
development of our country is a common goal upon which all parties should be
able to agree. Then I believe both the new government and the loyal opposition
will jointly recognize the political boundaries that stabilize the nation and
secure our democratic evolution.
If the post-election period focuses exclusively on a game of musical chairs,
where party leaders are more interested in ministerial portfolios and prized
legislative committee chairmanships than reaching specific policy goals, then
this election's success and the opportunity to move Ukraine forward risk being
Therefore, a parliamentary majority must outline its vision, the specific laws
and government programs it wants to pursue, and, most importantly, find the
professional staff to deliver results. Voters are expecting no less.
Since the Orange Revolution, new economic horizons have opened for Ukraine. Our
trading relations with the United States and the European Union have reached new
heights. We hope to join the World Trade Organization this year. We've
implemented tough and long-delayed reforms, among them market pricing for energy
resources, bank liberalization, and better intellectual property protection.
Expanding domestic consumer demand will continue to be a major source of
economic growth and job creation in the short term. Additional steps will be
required to upgrade our education, health care and social services systems.
Court reform and the fight against corruption must move forward. Developing our
transport infrastructure and expanding energy exploration, production and
conservation top our agenda. As do the sale of state assets in public tenders to
strategic investors to modernize outdated and under-funded production
In 2004, we began rebuilding public trust in government, starting a new dialogue
that has led to greater openness, new freedoms and a revival of national pride.
Voting patterns point to growing support for European democratic values. Finding
the right formula to complete Ukraine's first test in parliamentary democracy
and putting together a government will be the major test during the next few
Here is another view from the same source:-
Wall Street Journal March 29th
By MICHAEL MCFAUL
Since the 2004 Orange Revolution, most of the news from Ukraine has emphasized
the failures of the "revolutionaries." President Viktor Yushchenko and
his first prime minister, Yulia Tymoshenko, could not sustain the economic
growth rates seen under the pre-Orange government. Analysts in Moscow, London,
Kiev and Washington blamed Ms. Tymoshenko's alleged populism for declining
exports and depressed investment. Mr. Yushchenko looked like a feckless leader
who was then tainted with charges of corruption over a gas deal between Russia
and Ukraine, which delivered windfall profits to a mysterious company in
Ahead of Sunday's first elections since last winter, few Ukrainians seemed to
remember their last trip to the ballot box fondly. In opinion polls conducted
last month, only 19% believed that the country was going in the right direction,
60% in the wrong. These numbers were cited in various obituaries for the Orange
* * *
Then came Election Day. The results of Sunday's parliamentary poll and the
process that produced them underscore the exact opposite: The Orange Revolution
marked a democratic breakthrough in Ukraine that has not only proved enduring
but also been built upon.
The sceptics got a couple important things wrong. First off, the volatile
politics leading up to last weekend's vote were an expression of democratic
politics, not their rejection. After criticizing Ms. Tymoshenko for her
performance, President Yushchenko dismissed her and her government. That's the
way it's supposed to work in democracies. Accusations of corruption against Mr.
Yushchenko's administration, brought to light by an aggressive independent
press, forced resignations of other officials from his staff. That's also
democracy in action.
Then, most amazingly, both Ms. Tymoshenko and her detractors from within the
Yushchenko inner circle had the chance to compete against each other for votes.
No one was jailed, no one was removed from the ballot, no one was denied access
to television, and no one was denied campaign financing from private donors. All
that has become the norm in regimes further east of Ukraine.
Certainly, many Ukrainians may have been disappointed with the first results of
the Orange Revolution. There is always a letdown after a revolution as high
expectations often aren't met. But Ukrainian citizens did not express their
disappointment by checking out of the political process. On the contrary, the
70% turnout for a parliamentary election is truly remarkable. During the Orange
Revolution, Ukrainians came out on the streets of Kiev to protect their vote.
This week, they demonstrated yet again that they value their right to decide who
And this vote was freer and fairer than recent elections in Ukraine, and a vast
improvement over the tainted and falsified presidential election in 2004. To be
sure, there were organizational problems in the formation and preparation of
voter lists and local election commissions. Likewise, some complained that the
Regions of Ukraine party headed by Viktor Yanukovych, who lost out in 2004,
enjoyed unfair control of regional media outlets in the east, and that Mr.
Yushchenko's Our Ukraine used state resources for its campaign and enjoyed
greater media coverage. But compared to the 2004 election, the campaign
atmosphere for this parliamentary election was free of intimidation or gross
bias on the national television networks. Foreign and domestic electoral
monitors gave their stamps of approval to the process. Most importantly,
participants in the elections have accepted the results as legitimate.
Despite all the alleged failures of Ms. Tymoshenko, Mr. Yushchenko and the
Orange government, the basic distribution of votes between former Orange
coalition parties on the one hand (Yulia Tymoshenko's bloc, Our Ukraine, the
Socialist Party and Pora) and the anti-Orange parties (Regions of Ukraine, the
Communist Party and the Vitrenko bloc) is roughly the same as it was in the
final (and fair) round of the presidential vote in December 2004. Then, Mr.
Yushchenko won 52% of the popular vote compared to 44% for Mr. Yanukovych. On
Sunday, parties formally affiliated with the Orange coalition won 46% of the
vote, while the anti-Orange parties won 36% altogether. Despite all the bad news
out of Ukraine since the Orange Revolution, Mr. Yanukovych barely maintained his
electoral base -- 29.5% for Regions of Ukraine last Sunday, after all, is
significantly less than the 44% that Mr. Yanukovych won in 2004 -- and did not
orchestrate some kind of "comeback" in this election.
On the contrary, the real comeback kid is Yulia Tymoshenko. After her dismissal
as prime minister last year, her approval ratings plummeted and conventional
wisdom at the beginning of this year picked her party to finish third. Instead,
as a result of a tenacious campaign effort, she reclaimed the Orange mantle,
performing especially well in the central "swing" regions. While it
remains unclear how negotiations over a new government will end, what is clear
is that Ms. Tymoshenko is now well-positioned to become the next president of
* * *
A polarized electorate -- a lingering legacy of the Orange Revolution -- helped
to remobilize a significant number of Orange supporters. Voters did not cast
their ballots based on pocketbook issues, but instead were motivated by more
fundamental factors such as identity and support for or opposition to the Orange
Revolution. But supporters of the revolution did not constitute a solid
majority. If based on a thin majority, Ukraine's next government may not be
stable, and instead susceptible to defections from minority coalition members.
To forge a common national identity, Ukrainian leaders must eventually develop
political parties based on ideas (not simply personalities or linguistic
identities) capable of appealing to voters in all regions of the country.
Here is yet a third viewpoint:-
By Viktor Erofeyev, International Herald Tribune
Ukraine reminds me more and more of a large piece of meat that two cats are
The Russian cat believes that historically the meat belongs to it and was
stolen, and so feels insulted and humiliated. The Western cat thinks that Russia
has always treated this meat very badly, so taking it away is a sacred duty. It
has not fully decided, however, what to do with the meat.
Russia, as the recent "gas war" demonstrated, is prepared to take the
crudest and most decisive steps to get back the stolen meat. The recent
Ukrainian elections show that Russia does have a chance to get it back. But if
Russia swallows it, it will be bad for everyone - including Russia. A dependent
Ukraine will substantially weaken the chances for a future democracy in Russia.
In reality, though, Ukraine is not meat. Ukraine must be seen for what it is. It
is still a post-Soviet space: demoralized, uncertain of itself, somewhat
depressive, internally divided, to a degree criminalized. It needs time and
political will to overcome these problems.
But there's a distinct difference between the populations of Russia and Ukraine.
In Russia, more than 50 percent of the people regard Stalin as a positive
historic figure, as the founder of a powerful Soviet state. In Ukraine, Stalin
is a fallen idol; he is identified with forced collectivisation, famine and
repression. The defeat of Ukraine's Communists, who failed to get even 4 percent
in the parliamentary elections, marks a final break with the Soviet past.
The future, however, is more complicated. I was in Kiev before the elections
and, once again, I was struck by the beauty of its Orthodox cathedrals and its
chestnut parks. Even the Stalinist buildings along the main street, Kreshchatik,
did not discourage me - their facades are covered with innumerable
advertisements and the marquees of fashionable boutiques.
It is difficult for a Russian to see Kiev as foreign: For him it is the mother
of Russian cities, the oldest city of ancient Rus. Even now, with Kiev the
capital of an independent Ukrainian state, Russian is the language most often
heard in the streets. Ukraine is tied by blood to Russia - and not only by the
Young Kievan journalists with whom I met proudly described to me the Orange
Revolution on Independence Square. Now, after the elections, this pride has been
largely replaced by disappointment. The convincing victory of the pro-Russian
party of Viktor Yanukovich, who, despite a criminal past and falsified results
in the last presidential election, got nearly a third of all votes, speaks to
the serious crisis of the Orange Revolution.
The unstable, compromised coalitions that will be formed may well exhaust the
country and drag it into a political swamp. Once again, Ukraine hangs suspended
at the edge of two worlds, the West and Russia, living up to its name, which
Viktor Yushchenko turned out to be a political dreamer, almost utopian, while
his ally in the Orange Revolution, Yulia Timoshenko, literally drowned in
revolutionary rhetoric. The West also contributed to the fading of Ukraine's
European dreams. The European Union indefinitely postponed Ukraine's entry and
played an ambiguous game, enticing Ukraine westward and then turning away to
avoid irritating the Russians.
The Ukrainian writer Yuri Andrukhovich bitterly told me that Europeans treat
Ukrainians with suspicion; they see them as bandits and prostitutes. It seems to
me that Europe has to bring clarity to its Ukrainian policy. Ukraine has no
future other than Europe, and everything possible has to be done - including an
easing of the visa regime - so Ukrainians would feel at home in Europe, so
Ukraine would systematically move toward European economic and moral values.
Ukraine needs European guarantees.
The election results are a call to political realism. Ukraine turned out to be
insufficiently Western, but also not overly pro-Moscow. Yanukovich won, but he
did not conquer. Ukraine is hesitant, but it refuses to go backward.
Even Yanukovich is not against talking of integration with Europe, and he is
indisputably correct when he raises the language problem. Kiev's rigid policy
toward Russian, which is spoken by the overwhelming majority in eastern Ukraine,
and its openly Russophobic rhetoric, are not only the result, but also the cause
of mutual misunderstandings between Russia and Ukraine.
The sooner Kiev's politics become pragmatic, flexible and dynamic, the more
supporters it will find on both sides of its borders. Not all Russia should be
identified with the imperial pretensions of its current leaders.
Kiev's success depends on making democratic values attractive to its people, and
in safeguarding them from savage capitalism. Russian democrats suffered a defeat
in the 1990s and eventually gave way to Putin because they did not deal with the
real population, pressing their reforms on a theoretical nation. The West must
not put brakes on Ukraine's road to the EU and NATO, and likewise it must not
crow that Ukraine is moving away from Russia. Irritating Russia is not
tantamount to a successful policy.
The challenges before Kiev are not simple, but there is hope.
Seven companies to take part in Kerch PSA tender
Seven companies have been accepted to participate in a tender for concluding
production-sharing agreements (PSA) on the Prikerchenske oil and gas field,
Interfax News Agency reported.
An interagency commission for PSA agreements ruled that the Hunt Oil Company of
Ukraine, Shell, ExxonMobil, Vanco International Limited (the last three based in
the United States), as well as Turkiye Petrolleri AO (TPAO, Turkey), Alphex One
Limited (Britain) and Ukrnafta - will be able to take part in a tender for the
right to sign a production sharing agreement (PSA) for prospecting oil and gas
deposits in the Black Sea shelf located on the territory of Ukraine in the Kerch
zone. Stanislav Stashevsky, the commission chairman, earlier said that 12
companies had obtained tender documents, seven of which had paid for the right
to participate in the tender. Shell and ExxonMobil filed a joint bid, as did
TPAO and Alfex One.
Odessa-Brody-Plock is rentable
Transportation of the Caspian oil by pipeline from Odessa through Brody to the
Polish town of Plock and then further to the Western Europe is rentable. And
already the first year of operation will make a profit, the international
consultative consortium said recently as it presented a business plan to
representatives of the Polish and Ukrainian governments, the European Union, and
interested firms at the presentation of the study. RBK-Ukraine quoted Polish
Minister of Economy, Piotr Wozniakas, as saying the pipeline lengthened from
Odessa to Plock could begin to operate in 2009. For that it is required to
invest to its completion about US$450-500 million, Radio Liberty reported.
The International Consultative Consortium, which conducted the study, advised to
lay the Polish section of the Odessa-Brody-Plock pipeline by the shortest way
making a detour from Warsaw from its northern side, not as it has been proposed
earlier through the southern densely-populated regions. This variant will
diminish the costs of the projects by US$100 million and will accelerate the
The European Union backs up the project of the pipeline signed by Poland and
Ukraine in 2003. Secretary for issues of energy engineering and transport of the
EU Commission, Fauzi Bensarsa, expressed hope that a new pipeline would be
connected to the existing network of the Druzhba oil pipeline, by which Russian
oil comes to Germany.
Polish-Ukrainian Consortium Sarmatia was established to construct and operate
the Odessa-Brody-Plock pipeline. Its co-chairman from the Polish party, member
of the administration board in the Enterprise for Operation of Oil-Pipelines (PERN),
Cezary Levandowski, in the talk from Radio Liberty confirmed the forecasts of
the Polish minister. "In fact, if the conditions were favourable, this
project would be recompensed during the first year of operation. That is that
further on it would make a profit," he said.
Lewandowski said he hopes that the European Union will take part in the
financing of the project. The European Investment Bank is interested in
Europe has approved the final project of completing the Odessa-Brody pipeline. A
consortium of companies - SWECO PIC, ILF GmbH and KANTOR - has presented a frame
project of completing the Odessa-Brody-Plock works which are financed by the
Bensarsa stated in Warsaw on March 15th that the European Commission estimates
the first deliveries of the Caspian oil by the Odessa-Brody-Plock route in 2009.
"We reckon on the beginning of operation of the pipeline in 2009,"
said Bensarsa said. By the estimations of the European experts the construction
of the pipeline will take about 18 months.
Bensarsa has emphasised that conducted researches are evidence of the growing
market of consumers of the Caspian oil in Europe and the increase of its
production at the Caspian Sea, which guarantees that the project has prospects.
He emphasised as well that the issue of diversification of energy carriers is
one of the most important for the European Union, noting, that the pipeline will
make it possible to increase the energy independence of the EU. He added that
the European market of oil consumers differs by high paying capacity.
According to Bensarsa, the international consortium advises the completion of
the Ukrainian oil pipeline Odessa-Brody to Polish Ozhechowo. He has noted that
from Ozhechowo to Plock a pipeline was laid, which may be used to deliver the
Caspian oil by the Odessa- Brody-Plock route. By Bensarsa's data, this route has
been chosen from five alternatives as it is the shortest and makes it possible
to save US$100 million in the construction of the pipeline and pump stations.
Bensarsa said Brody-Ozhechowo is shorter than the other routes by 70 kilometres.
Bensarsa has refused to give the price for the construction of this section,
noting that promulgation of these data are the prerogative of the state
oil-transportation companies of Ukraine and Poland - Ukrainian joint stock
company Ukrtransnafta and Poland's Pern Przyjazn. Ukrtransnafta Press Secretary
Oksana Balyun said the Brody-Ozhechowo route is the most simple as it does not
go through rivers and nature conservation areas in Poland. Ukrtransnafta had
earlier stated that US$350-450 million in investments will be required for
completing the Odessa-Brody pipeline to Plock.
Gas transit through Ukraine down 1.2% in Q1
The transit of natural gas through Ukraine fell 1.2 per cent, or by 0.4 billion
cubic metres in the first three months of the year to 33.3 billion cubic metres,
Interfax News Agency reported.
Gas transit in March this year fell 0.9 per cent (by 0.2 billion cubic metres)
to 11.4 billion cubic metres, a source in the fuel and energy ministry said. Oil
transit dropped 3.7 per cent, by 310,400 tonnes, to 8.092 million tonnes in the
reporting period, the source said.
World Bank credit to reconstruct roads
The World Bank is ready to consider a request from Ukraine for a credit of about
150 million Euro to finance road reconstruction projects, Vadim Gurzhos, head of
the State Road Service said recently, New Europe reported.
He said that this may include projects to reconstruct the Kiev-Kharkiv or Kiev-Uman-Vinnitsa
highways, but no final decision has been taken yet. Gurzhos said the World Bank
may provide a credit at LIBOR + 0.5 per cent. Only the European Bank for
Reconstruction and Development could provide the same terms, he said.