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Where there is no law, but every man does what is right in his own eyes, there is the least of real liberty
Henry M. Robert

Bitter Taste of Oil Halvah

10 November, 1998 - 00:00


NSDC Secretary Volodymyr Horbulin has a point claiming that Ukraine
should not discard the long-cherished and suffering Baku-Supsa-Odesa-Brody-Adamova
Zastava oil pipeline project under the circumstances, because "at present
there is no definite other route for transporting crude oil to European
countries."

The Day was informed by a Foreign Ministry source that a memorandum,
rather than an agreement, was signed with Turkey, with the Azerbaijani,
Georgian, and Turkish sides (eventually joined by the US Secretary of Energy)
giving preference to the Baku-Jeichan as the most promising one.

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.

 

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