Press Conferences

23 march, 2009 20:00

Prime Minister Vladimir Putin addressed a news conference

Prime Minister Vladimir Putin addressed a news conference
"The European Commission is paying ever greater attention to energy transport-in particular, natural gas piping via Ukraine. That is good, as is the attempt to put the gas transport operator under the control of international legal norms and regulations. I think we should, and can, support it."
Vladimir Putin
News conference

Question: Mr Putin, a conference on the Ukrainian gas piping system has been held in Brussels, and the European Union and Ukraine have adopted a declaration. What would you say in response?

Vladimir Putin: The European Commission is paying ever greater attention to energy transport-in particular, natural gas piping via Ukraine. That is good, as is the attempt to put the gas transport operator under the control of international legal norms and regulations. I think we should, and can, support it.

Still, some problems remain unsettled, including the declaration you have mentioned. I have read it. It says that the normal performance of the gas piping system is an earnest of political stability in Ukraine and the European Union countries. However essential those matters might be, they should not acquire excessive political colouring. One should not take it too far.

Next, though the declaration refers to the independence of the gas transport operator, its wording is too obscure to see what independence and from whom said independence is meant.

As you know, the global financial and economic crisis has found many countries in dire straits. Russia is solving its problems-the budget deficit in particular-by relying on available reserves. Ukraine has no such opportunity.

We have made sufficient loans to our CIS partners. Prospects for a loan to Ukraine are being discussed. We have called on our European partners at recent meetings of various levels to pool our efforts for a joint loan to Ukraine-to which the European Commission responded by saying it could not afford the loan. Does this mean someone is out to exploit the economic crisis to rob Ukraine of its gas piping system? If so, that is a bad way to settle the problem-I know how sensitive Ukraine is on the government holding of gas transport.

Last but not least, on the question of necessary modernisation of the system, it is poised to increase gas pumping by 60 billion cubic metres. We pumped approximately 113 billion cu m via Ukraine last year, and supplied a rough total of 130 billion cu m to Europe.

We also know that Russia and its European partners have repeatedly put the diversification of energy transport routes to European consumers on the agenda within the preceding years.

That is why we have advanced project Nord Stream and are implementing it to pump 30 billion cubic metres of gas a year across the Baltic Sea bottom. The South Stream pipeline will be laid on the Black Sea bottom for another 30 billion or more.

Europeans are discussing other projects, Nabucco among them-but where will gas be taken for them?

I think the document we are referring to is unprofessional and insufficiently thought out, to put it mildly, because one cannot be serious in discussing such matters without the principal supplier's participation.

The document also says that the volume of pumped gas should be the main incentive for lucrative investments. This is natural, since transit fees are a means of paying back the loan, but has anyone asked our opinion as to whether we can cope with such volumes of gas in the future, or whether we will do so?

If it is a mere technical setback in the problem-laden Russia-Ukraine-EU triangle, matters might turn out all right-but if it is the start of all-round dismissal of Russian interests, that is surely a bad sign, considering Russia's excellent partner ties recently established with practically all pivotal European energy companies. These ties involve coal, nuclear energy, and electricity, in which European companies have invested billions of dollars. In turn, Russia buys in Europe $26 billion worth of gas transport equipment. This also concerns oil and gas production and transport. If Russian interests are shrugged off, we will also have to start reconsidering the principles of our relations with partners. I hope things do not go that far.

What matters most, I stress, is that there is no way to arrange an increase of Russian gas exports without Russian participation. I hope this message is heard. We are willing to work constructively with all our partners the way we have repeatedly declared, and on the basis of principles that we have formulated and have been proceeding from in our work. Thank you.

Question: You mentioned a prospective loan to Ukraine. What sum does this imply, and how might it be formalised?

Vladimir Putin: It concerns a Government-guaranteed state credit of 5 billion dollars, which was the sum under discussion. But-I repeat this again-we have made considerable loans to our other CIS partners. An application has been made to discuss the prospects with Ukraine, and we have posed the question to our European partners. As I have said, they replied that they had no spare money for Ukraine just now. However, we are continuing a dialogue with our Ukrainian and European partners, and we will discuss the issue later on.

Surely, budget support is more complicated than matters that might, and later will certainly, be economically attractive, lucrative, and less hazardous than at present. I stress this, though it might not be so evident today.

One of such projects concerns the maintenance of the gas piping system in a normal state. We signed a relevant declaration several years ago with President Kuchma. Three countries signed the document-Germany, Russia, and Ukraine. Russia offered it, and our Ukrainian partners agreed in principle to establish a transnational consortium of Russian, European, and Ukrainian companies that would lease the gas piping system, which would have stayed in Ukrainian possession.

I think it was a good idea deserving of revived discussion. At any rate, when it comes to the use of the system to pump Russian gas, the participation of Russia as the supplier is indispensable. I repeat again that it would not be serious to regard such matters without Russian participation.

Question: Mr Putin, you have said that somebody is out to rob Ukraine of its gas piping system. Who might it be?

Vladimir Putin: I have no idea who it might be, but if you take the declaration we are discussing, one of its clauses refers to the independence of the operator without specifying independence from what is meant. Does it imply independence from arbitrary officials who, let's say, send masked machine-gunners to the Ukrainian NAK government oil and gas company in search of a contract on which our gas is piped to European consumers? Thankfully, they have not found the original contract. Or does it concern the operator's independence from the Ukrainian state? The declaration does not specify it, saying only that the entire system should work in compliance with European law. That might be good-to Russia, at least, as guaranteeing an extent of stability and transparency. Things would be quite different if the declaration implies independence from the Ukrainian state, considering how Ukraine is sensitive on its own state possession of the gas piping system.

That was what we meant in our time-Chancellor Schroeder, President Kuchma, and I-when we advanced what I consider to be an all-round watertight formula, according to which the Ukrainian state possession of the gas piping system would not disappear. Ukraine should remain the owner of the system while the transnational consortium with Ukrainian, Russian, and European participation leases it on a long-term basis, with Ukraine acting as property holder, setting the terms to face all risks implied by the development of the system and its maintenance in a normal working order.

Thank you.