A Ukrainian delegation is coming to Moscow to discuss Russian Prime Minister Vladimir Putin's proposal.
Today, the Ukrainian Supreme Rada will hear the government's report on draft documents that are being prepared for the May 17 meeting between Ukrainian President Viktor Yanukovych and his Russian counterpart Dmitry Medvedev. The meeting is scheduled for May 17. The Ukrainian opposition fears that Putin's proposal to unite Ukraine's Naftogaz and Russia's Gazprom, which was made public in late April, will be put into effect in a week. However, Yulia Tymoshenko's appeal to protest against government's actions was not heard yesterday.
On the first day after the holidays, some two thousand supporters of Yanukovych confronted the same number of Tymoshenko's enthusiasts gathered near the Supreme Rada building. Expecting mass protests, the authorities had played it safe and called nearly an equal number of police officers on to the scene. Not long ago, trying to protect the country's independence the opposition set up the Public Committee for Ukraine's Salvation.
Tymoshenko, who spent the entire holidays at meetings and rallies, tried to persuade the public that Yanukovych was giving away all the country's strategic sectors to Russia, of which the oil and gas sector would be the last hand-out.
"They started with the Crimea," she said. "Then they announced the establishment of so-called joint ventures on the basis of the state's strategic assets of vital importance – JVs with Naftogaz, Energoatom, Turboatom, Ukrtelecom, Ukrzalyznitsa (railways) and aircraft building. This is not a unification of efforts on principles of partnership, but rather a complete Russian takeover of Ukraine. Ukraine's share in these JVs will not even be a minority stake. Our properties will be completely dissolved within Russia's vast expanses".
Bogdan Sokolovsky, the Ukrainian president's former envoy for international energy security issues, confirmed that the Naftogaz-Gazprom unification would signify the Russian giant taking over a Ukrainian company that is dozens of times smaller by all indicators.
According to data from the Gas Information Agency, based on the companies' consolidated IFRS reports for 2008, Naftogaz's share in the united venture will be about 6%.
Konstantin Bondarenko, the head of the Gorshenin Institute (of Management Issues), told NG that another share distribution scheme was unofficially discussed – 20% to 80% in the Russian company's favour. He thinks the idea is infeasible as it runs counter to the applicable laws of both countries, as well as the interests of many Ukrainian financial and industrial groups that do not want to see the Russian company on the domestic market.
Vladimir Omelchenko, an expert at the Kiev-based Razumkov Centre (for Economic and Political Studies), pointed out that it is not just Ukrainian legislation that bans actions changing the state's ownership right to the gas pipeline system and its managing company.
"In 2008, Russia also passed a law banning foreign investors' access to strategic sectors, the oil and gas sector included," he said.
Omelchenko noted that, most probably, Putin's proposal can be explained by Russia's intention to divert public attention from other important agreements.
In late April, the two countries' government delegations agreed on integration in nuclear power engineering. Experts say they discussed, among other things, Russian companies' access to Ukraine's unique uranium ore deposits. If the Russian prime minister had not mentioned the prospective unification of the two countries' oil and gas assets, the new agreements on nuclear power cooperation would have caused a scandal.
Meanwhile, government officials assured NG that Putin's statement should be viewed as a real proposal. They say that, as early as this week, a Ukrainian delegation led by Fuel and Energy Minister Yury Boiko will arrive in Moscow to discuss the unification. Ukraine's official sources offer no comment on the issue, but Russian sources confirm the delegation's scheduled visit. However, they added that the issue is so complicated that it cannot be settled in a week during the talks between the two countries' leaders in Kiev.
Ukrainian President Viktor Yanukovych's reaction to Putin's proposal was also cautious.
"How should we view the Russian prime minister's initiative?" he said. "I think, as one possible option for gas cooperation with Russia. True, this subject has not been discussed before. This is an impromptu idea. And Ukraine will give its answer only after it studies the issue from the point of view of its national interests."
"If we decide to start talks on this issue, then we can invite the EU to participate at a certain stage as the main gas consumer and our major partner," he added.
However, Marlene Holzner, the EU Commission energy spokesperson, told Ukrainian news agencies that the EU would not interfere. The statement caused indignation on the part of the Ukrainian opposition, which underscored that Russian gas is transported to Europe via Ukraine. This means that Europe's energy security directly depends on the documents that may be signed by Yanukovych and Medvedev. However, a recent statement by Russian Energy Minister Sergei Shnatko that the unification of the Russian and Ukrainian companies will not affect the South Stream project, and the Europeans will have their guaranteed gas supplies, seems to run counter to this thesis.
Valentin Zemlyansky, a former Naftogaz employee, told NG that Russia is primarily interested in controlling Ukrainian gas depots that are unique in terms of capacity and location, and also having direct access to the Ukrainian gas market. At the same time, he disagreed with the opposition's gloomy forecasts.
"Agreements on the two companies' unification may benefit Ukraine, but only on parity terms," the expert said. "If Kiev manages to finalise advantageous positions in these documents, Naftogaz will resolve a host of complex problems, including the modernisation of the gas pipeline system, the filling of gas storage depots and an increase in the gas transit flow".
Zemlyansky said it is yet too early to assess the unification idea because the documents on the forms and framework for implementing it have not even been drafted. Theoretically, he admitted the possibility of the two companies' unification and said the Ukrainian and Russian parliaments can amend laws preventing the move.
Back in February, when the idea of a gas pipeline consortium (envisaging the sale of a 25% stake in the Ukrainian gas pipeline system to Russia and the EU) was under discussion, Sergei Tigipko, Ukraine's current deputy prime minister, assured NG that it was quite possible. "There is nothing too complicated about it, it is all feasible", he said. "Draft laws are written by deputies. A new majority to be formed in the Supreme Rada will assess the real situation and one more new law will be enough".
There is already a majority in the Ukrainian parliament supporting Yanukovych's policy. This may signify that the idea of the Naftogaz-Gazprom unification will be put into effect.
By Tatiana Ivzhenko
