Bitter Taste of Oil Halvah

According to Leonid Nester, head of the Ukrainian state Derzhnaftohazprom (State Oil & Gas Industry) Co.'s investment department, this document has no legal force and will not stop the Supsu construction project in Georgia. Mr. Nester further believes that Caspian oil proprietors see only one task ahead: get this oil pipeline as far as the Black Sea ports, leaving the task of transportation routes to the importer, the latter placing major emphasis not on political but commercial considerations, such as the length of the transportation line, seaport reloading costs, and pipeline delivery charges.

Mr. Horbulin, being an idea man, ought to know better than anyone else that that building the oil terminal and the connecting Odesa-Brody pipeline has long been at a standstill, except for disassembly work. After setting up the national Naftohaz Ukrainy (Oil & Gas of Ukraine) Co., all money received from the "uniform" investor, the Druzhba and Trans-Dnipro arterial oil pipelines, have been accumulated in Kyiv whence not a cent has been sent to Odesa. There is not even an adopted finance schedule. Due to the Ukrainian side's frivolous approach, there is no chance EBRD will back the project. Hence, Mr. Horbulin's optimism, particularly his assurances about the cost of oil transportation via Ukraine being $10 less per ton than when using all the other routes, reminds one of the old truth that one must not sell the skin until one has first shot the bear.

Meanwhile, breaking up the originally pro-presidential NDP faction in Parliament, considering that it produced people having close ties with Naftohaz Ukrainy, may be regarded as evidence that Presidential Administration team will have new problems trying to keep oil and natural gas assets under its control.