Prime Minister Vladimir Putin will spend this weekend in the Crimea. Alyona Hetmanchyuk, director of the Institute of World Politics was the first in Ukraine to publish this news with a reference to diplomatic sources. Yesterday the Russian and Ukrainian government agencies unofficially confirmed it. Later, the Russian Consul-Ambassador in Ukraine, Vsevolod Loskutov, officially told the Ukrainian News Agency that Putin was going to the Crimea on June 25-26. Some Ukrainian observers made some provocative predictions about his visit although its goal was not reported.
Quoting Russian diplomats, Hetmanchyuk said Ukraine initiated the informal meeting. "It looks like Ukraine is finally ready to offer a realistic proposal for a gas price discount," she said, specifying two possible scenarios – a Naftogaz merger with Gazprom or a new approach to Customs Union integration.
Yesterday even high-ranking Ukrainian officials could not say anything about the agenda. One Ukrainian official told NG: "This will be an informal meeting, a friendly conversation. Ukrainian Prime Minister Mykola Azarov left for vacation only yesterday and was planning to spend it in the Crimea. Apparently, he'll go to the government residence in Foros and Putin is most likely to join him there. There has been no official preparation – this is a private visit." His colleague from Kiev said President Viktor Yanukovych may also spend this weekend in the Crimea. There was no information about his official plans for the weekend yesterday. Both sources agreed that the hastily organised and undisclosed nature of the meeting could result in a significant outcome.
Indicatively, Putin's last visit to Ukraine in April was a tension-filled affair. He suggested Kiev think about its position on the Customs Union, laying out convincing economic arguments in favour of integration. Ignoring this suggestion, his hosts insisted on revising the Russian gas price formula. They blamed Yulia Tymoshenko for negotiating a bad deal, for as yet unclear reasons, and complained that the Yanukovych team is now forced to deal with the issue. Both parties appealed to the spirit of partnership but failed to find common ground: Gazprom refused to revise the contracts and Kiev confirmed its intention to continue considering a planned agreement on a free trade zone with the European Union (EU).
At that point, some EU agencies had played up to Ukraine with certain concessions and had announced that the agreement could be signed in September. However, over the subsequent two months, the tone of the Ukraine-EU dialogue once again deteriorated. A few days ago Jose Manuel Pinto Teixeira, the head of the EU delegation in Ukraine admitted that this agreement would not be signed in September. One Ukrainian official commented: "The EU has long played this game. They promised Yushchenko they would sign documents for Ukrainian associated membership, and now they offer this carrot to Yanukovych whenever rapprochement with Russia seems likely."
Yury Korolchyuk, an expert from the Energy Research Institute noted: "Let's be realistic. Nobody in the EU is looking forward to Ukraine's entry – they have enough problems of their own. This weakens our position considerably in our talks with Russia, including the gas negotiations."
He said the latest developments in the Kiev-Brussels negotiations have compelled Kiev to yield to Russia: "I don't think it will come to a Naftogaz-Gazprom merger but the parties may discuss a form of joint control over Ukraine's gas transportation network, including gas depots." Korolchyuk emphasised that the sides will not make any decisions at this point because this is a weekend visit.
Vitaly Bala, director of Situations Modeling Agency confirmed they would only listen to any new positions if they hold talks in the Crimea at all. He explained that Kiev cannot afford to sit idle anymore: "By the end of the year the price of gas will be $400 and up. This could result in an economic crisis. We must take some measures without delay."
Bala doubts recent events will compel Kiev to renounce Euro integration in favour of joining the Customs Union: "Maybe, tactically this would be a gain, but strategically it would be an absolute loss. I think the government officials realize this." He believes the concessions that would motivate Putin to leave for the Crimea so quickly are economic in nature.
Korolchyuk suggested the leaders could discuss a very profitable and promising project on the Black Sea shelf. Naftogaz CEO Yevgeny Bakulin confirmed that his company is planning to establish a joint venture with Gazprom on oil and gas prospecting and production. A framework agreement was reached last December, but it was not formalised because of terms Ukraine added that were unacceptable to Russia.
Earlier Alexandra Dudchenko, a fellow at the Ukrainian National Strategic Studies Institute told journalists that no more than 4% of the shelf's potential had been developed so far and that deposits at a depth of four to five kilometers had not been studied at all. Researchers estimate the initial aggregate hydrocarbon resources in the Ukrainian Black Sea and Sea of Azov sectors at 1.5 billion tons of conventional fuel. "Huge investment will be necessary, but profits will also be fantastic," Korolchyuk said. He thinks Ukraine could ease its gas contract terms by offering Putin an opportunity to consider this highly promising project in exchange for a new gas price discount during a friendly conversation.
Tatyana Ivzhenko