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UKRAINE


 

 

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 49,537 41,380 37,600 55
         
GNI per capita
 US $ 970 770 720 137
Ranking is given out of 208 nations - (data from the World Bank)

Books on Ukraine




Update No: 316 - (26/04/07)

Crisis continues 
The current political turmoil in Ukraine erupted in March when 11 lawmakers from pro-presidential factions defected to Prime Minister Viktor Yanukovich's ruling coalition.

Ukrainian President Victor Yushchenko issued an order in early April to dissolve parliament and hold early elections on May 27. Yanukovych and his ruling coalition in parliament have refused to accept the order. Thereupon Yanukovych called for international mediation to resolve the crisis. What he clearly had in mind was that during the "Orange Revolution" in Ukraine at the end of 2004, Adamkus and then Polish president Aleksander Kwasniewski participated in mediation together on the political crisis. 

Lithuania and Poland ready to mediate in Ukraine political crisis
President Valdas Adamkus is willing to mediate in Ukraine's political crisis if Kiev so requested, the Lithuanian presidential spokeswoman said on April 18th. But until now, Lithuania has not received such an invitation. 
Polish President Lech Kaczynski paid a brief visit to Lithuania in mid-April and met with his Lithuanian counterpart Adamkus, with whom he discussed the Ukrainian situation. Kaczynski told a news conference that Poland did not want to interfere in Ukraine's internal affairs, but was ready to help out if Ukraine turned to his country for such assistance.
The stand-off is being closely watched by outside powers anxious about the political course of this country of 47mn people, located between the European Union and Nato to the west and Russia to the east.

Yushchenko seeks support from EU 
President Yushchenko, whose decree to dissolve parliament triggered the political crisis at home, travelled to Brussels April 16th to seek support from the European Union (EU). "The essence of the problem is that by forming the coalition in parliament, they applied unconstitutional mechanisms," Yushchenko told reporters after a meeting with European Commission President Jose Manuel Barroso. Yushchenko added: "The majority coalition is founded by a coalition of factions, not a coalition of MPs. The constitution does not allow individual membership in the coalition." 

He said the switching of an MP (member of parliament) from a faction to the coalition is about the "substitution of the political will and the will of the electorate." The prerequisite to the solution of the crisis is early elections, he added. 

Barroso was careful in his comments to avoid the impression that he is taking sides. "My message to the president of Ukraine, President Yushchenko, and to the Ukrainian people is the following: we support democracy and stability in Ukraine," he told the same press conference. He said he encouraged Yushchenko in his pursuit of efforts to find with all key parties a viable solution in full respect of the principles of democracy and the rule of law. "There is no political problem in a democracy for which there is not a political solution." If there is good will, there is always a possible solution, he said.

Barroso hoped that the crisis could be resolved soon so that EU-Ukraine relations can move forward. 
Yushchenko has vowed to pursue a political solution. "We are determined to find a democratic resolution of the parliament crisis in Ukraine. We've never been saying and could never be speaking about any option of using any force to resolve the situation." 
Yushchenko said there should be no risk of military intervention in the crisis. But he warned his opponents against moving people from the regions to the cities.

Ukraine court hears arguments from M Ps 
Thousands of demonstrators, nevertheless, surrounded Ukraine's constitutional court on April 22nd as parliamentary deputies told judges why a presidential decree to dissolve parliament should be declared invalid.
For a fifth day running the court heard arguments on the legality of Yushchenko's April 2 decree to dissolve the legislature amid a feud with Prime Minister Yanukovich, plunging the ex-Soviet country into a constitutional crisis.

The 17 judges of the court later adjourned. They still have to hear more members of parliament as well as representatives of the government and the central electoral commission.
Deputy Yaroslav Mendus told the judges that Yushchenko had exceeded his authority by claiming the constitution allowed him to dissolve parliament. "Only the constitutional court is allowed to interpret the basic law. If the president gets involved in this, it means we have serious problems," Mendus said.
The president has justified his move by saying that Yanukovich's parliamentary majority had violated the constitution by luring pro-Yushchenko deputies into switching sides. Yanukovich has opposed the dissolution and members of his majority asked the court to rule the decree illegal.

It is not clear when the court will make a decision. On the streets outside, thousands demonstrated both for and against the dissolution amid a police presence that has grown significantly since a demonstration delayed the hearing for an hour on April 18th. Both sides' supporters have held protests in the capital nearly every day since the president issued his controversial decree.
The latest round of talks between the prime minister and president on April 20th failed to break the deadlock.

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ENERGY

Naftogaz approves programme to develop Egypt block


The executive board of Naftogaz Ukrainy has approved a programme of work to explore and develop the Alam El Shawish East, oil and gas block in Egypt, the company said in a statement, Interfax News Agency reported.
The document was developed to implement a concession agreement between Egypt and Naftogaz Ukrainy on the prospecting, exploration and development of oil and gas fields in the Alam El Shawish East block, signed in December 2006.
Once the planned work is completed information will be assembled to draw up projects for the construction of exploration wells and structures for exploration drilling with potential oil resources of 359.4 million tonnes.
Naftogaz is implementing the hydrocarbon production project in Egypt under a government program to diversify sources of hydrocarbon supplies to Ukraine. This project provides a unique possibility for Ukraine to enter the oil and gas production segment of North Africa with the perspective implementation of similar projects in other countries in the region.
The block is in Egypt's Western Desert and measures 974 square kilometres. The concession agreement is for 27 years, of which the exploration period is three years, and the estimated payback period is 5.5 years.
The Alam El Shawish East property has recoverable C3 oil resources of at least 73.5 million tonnes, according to an estimate by Naukanaftogaz, a subsidiary of Naftogaz, and which Ukraine's Federal Reserves Commission has confirmed.
According to the concession agreement, Naftogaz Ukrainy will be the contractor for exploration work at the territory of the Alam El Shawish East block for the exploration period. Investment in exploring hydrocarbons at the block will amount to at least USD 20.2 million.

Ukrtransnafta to increase oil transportation 19%

Ukrtransnafta, the Ukrainian oil transport monopoly, plans to increase oil transportation 19 per cent to 53.4 million tonnes in 2007, company CEO Igor Kiryushin told journalists in Kiev on April 3rd, New Europe reported.
He said 40 million tonnes of the planned volume would be transit, and 13 million tonnes would be supplied to Ukrainian refineries. Kiryushin also said that in the first quarter the company increased oil transportation 14 per cent year-on-year to 13 million tonnes. Ukrtransnafta is the operator of the Ukrainian oil transport system. The company is 100 percent owned by Naftogaz Ukrainy.

Kazakstan, Azerbaijan mull Odessa-Brody-Gdansk

Kazakstan would like to see the Odessa-Brody pipeline to be extended to Poland's Gdansk and wants Russia to be involved in talks on the project, President Nursultan Nazarbayev said. "By 2012-2014 Kazakstan will evolve into a major exporter of oil to international markets. But the projected twofold increase in oil extraction by 2012-2015 is making us seek new ways (of transporting it). An Odessa-Brody-Gdansk project would be a good alternative for us," Nazarbayev said at a joint news conference in Astana on March 29th, after talks with Polish President, Lech Kaczynski. "I would like to make special mention of our interest in this (project.) And Russian organisations must be necessarily asked to participate," he said.
"It's not a political, but an economic issue, because excess oil would be transported from Kazakstan through Russia," he said. "There is no railway running through the Caucasus. It must be built. A terminal must be built in Supsa and in Batumi. So, how could we transport (Kazak oil)? By increasing the handling capacity of the CPC north-Caspian pipeline," the Kazak president said, Interfax News Agency reported.
"Therefore, we must take this issue seriously. If we do, by 2011-2012 we'll definitely put first oil through this oil pipeline (Odessa-Brody-Gdansk)," Nazarbayev said.
Nazarbayev said that "Kazak companies would like to buy oil refineries in Poland and to build a pipeline jointly, and to make investments and to have equity."
Meanwhile, Azeri Industry and Energy Minister Natik Aliyev said at a press conference on March 28 in Baku transportation of oil by Azeri state oil company SOCAR through the Odessa-Brody pipeline may become attractive if the company acquires a refinery in Ukraine.
"The question of Azerbaijan joining the Odessa-Brody is constantly brought up. However, we already have three oil pipelines to export our oil to the world markets: Baku-Novorossiisk, Baku-Supsa and the main export route - Baku-Tbilisi-Ceyhan. If we were to become the owner of some refinery in Ukraine, along with setting up our own chain of filling stations, then it will be profitable for SOCAR to transport its oil to Ukraine, with subsequent refining and sale of oil products," Aliyev said.
The minister said that at this stage Ukraine, if it wishes, might acquire on general terms, oil that Azerbaijan exports through Black Sea ports in Georgia and Russia, and transport it though the Odessa-Brody.
In another development regarding Odessa-Brody-Gdansk, Ukrainian Prime Minister
Viktor Yanukovich said Ukraine is examining the possibility of shipping oil through the Odessa-Brody pipeline to the town of Kralupy nad Vltavou in the Czech Republic.
"We are talking about launching it (the Odessa-Brody oil pipeline) as originally planned. We intend to make the first step in the direction of the Czech Republic to Kralupy," Yanukovich said at a joint press conference with European Commission Chairman Jose Manuel Barroso in Brussels on March 27th. "Today the issue is being coordinated with the owner of the section, Russia," he said.
In addition, Yanukovich confirmed Ukraine's interest in completing construction of the Odessa-Brody oil pipeline to Plock and Gdansk.
"Construction to Plock and Gdansk is the second stage in the pipeline's construction and it remains in our plans," he said.
According to Yanukovich, one of the first steps in the construction of the Odessa-Brody oil pipeline is the beginning of joint work on the Odessa-Brody-Kralupy project. "The solution of this issue will provide optimism to all participants in the projects, and this will be a real step toward putting the project into action," he said.
The Caspian nations partners in the project "are interested in this," he said. "We agreed with the Polish prime minister to jointly work in this direction," he said.
According to earlier reports, the prime ministers of Ukraine and Poland, Yanukovich and Jaroslaw Kaczynski, agreed on the project to ship oil through the Odessa-Brody oil pipeline to Kralupy, Czech Republic, in November 2006.

Yushchenko proposes privatising coal mines

Ukrainian President, Viktor Yushchenko, said he believes that selling off the country's coal industry enterprises to private owners will help resolve a number of problems facing the sector. "We have to do everything possible to ensure that not only the state is interested in developing the industry. We need to have a lot of partners, including private organisations," Yushchenko told a meeting with representatives of the coal industry in Luhansk on March 29th, New Europe reported.
"I am convinced that only few people can say the following: let the state tackle problems facing the sector on its own, and that only funds provided by the state can generate prospects for the industry and its development. This is not so. Doors should be opened to let in other opportunities, including, of course, privatisation," the president said. However, privatisation processes must take into account the social rights of all miners and be useful to them, he said. "But, on the other hand, it is necessary to support everyone who is able to create at least a few jobs. There is a need for comprehensive support for the development of medium-sized business. It will help it go out of the shadow and become part of a transparent economy," Yushchenko said.

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MINERALS & METALS

Suha Balka reduces sinter output 0.8% in Q1

Suha Balka, an iron ore producer from Krivy Rih in Ukraine's Dnipropetrovsk region, reduced sintering ore production 0.8 per cent year-on-year in January-March to 765,000 tonnes, including 265,000 tonnes in March, the company said, Interfax News Agency reported.
Production fell 6.6 per cent to 3.028 million tonnes in 2006. The Privat Group of Dnipropetrovsk controls Suha Balka. Suha Balka's shareholders voted at their AGM on April 6th to waive dividends for 2006 and to use net profit of more than 24 million hryvnias to top up working capital. The 40 million hryvnias profit that the company is targeting in 2007 will be put to the same use.

Mittal Steel Kryviy Rih boosts roll output 15%

Mittal Steel Kryviy Rih (formerly Kryvorizhstal), Ukraine's biggest steel mill, boosted finished roll production 14.8 per cent year-on-year in January-March to 1.795 million tonnes, the Ukrainian Industrial Policy Ministry said, Interfax News Agency reported.
Pig iron production grew 19.6 per cent to 1.849 million tonnes, sinter rose 11.7 per cent to 2.995 million tonnes and crude steel rose 22.5 per cent to 2.07 million tonnes. Coke production grew 15.8 per cent to 768,000 tonnes and iron ore concentrate production grew 17.9 per cent to 2.06 million tonnes, however crude ore production fell 1.1 per cent to 473,000 tonnes. In March alone, the mill produced 615,000 tonnes of finished roll, 716,000 tonnes of crude steel, 629,000 tonnes of pig iron and 1.019 million tonnes of sinter. Mittal Steel Kryviy Rih controls up to 20 per cent of Ukraine's steel market.

Steel roll output increases 12% in Q1

Ukraine's steel industry increased finished roll output 12 per cent year-on-year in January-March to 9.02 million tonnes, the Industrial Policy Ministry said, Interfax News Agency reported.
Ukraine produced 10.63 million tonnes of crude steel, up 13 per cent, and 8.77 million tonnes of pig iron, up 15 per cent year-on-year, the ministry said. Steel pipe production rose 22 per cent to 680,000 tonnes. Iron ore concentrate production grew 12 per cent to 14.68 million tonnes, pellet production - 25 per cent to 5.45 million tonnes and sinter - six per cent to 12.26 million tonnes. Ukrainian coke production rose seven per cent to 4.89 million tonnes and metalware output rose 13 per cent to 110,000 tonnes.

Yutist pipe plant sees earnings soar 180% in 2006

The YuTiST steel pipe plant reported net profit up 180 per cent in 2006, to 10.17 million hryvnias, New Europe reported.
The plant's receivables almost doubled to 125.478 million hryvnias last year, the company said in a statement for its May 18th annual general meeting. Long-term financial investments decreased by almost 50 percent to 1.147 million hryvnias. The plant's long-term liabilities surged 32-fold to 16.043 million hryvnias, and current liabilities rose 55 percent to 140.119 million hryvnias.

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