Gas cycle
They finally signed it. On Monday, Oct. 23, 2006, Ukraine’s Prime Minister Viktor Yanukovych and his Russian counterpart Mikhail Fradkov held a meeting of the intergovernmental committee for economic cooperation and signed a number of bilateral documents. This is a set of regulations of the intergovernmental committee and minutes of the meeting, and a program of interregional and border cooperation and related measures.
Institutions and economic subjects related to the gas market have been tasked to carry out an inventory and analysis of intergovernmental gas contracts currently in force, and to decide by June 2007 if they are to be altered. By Dec. 1, 2006, Ukraine’s Ministry of Fuel and Energy and Russia’s Ministry of Industry and Energy will have prepared a draft protocol for 2007 to the Sept. 7, 1994, intergovernmental Ukrainian-Russian agreement for cooperation in the development of fuel and energy complexes. They also reached some essential agreements in the field of electricity supplies, namely, supplies of Ukrainian electricity to Russia. Cooperation in the sphere of aircraft construction and space exploration will be continued as well. Positive changes are to be expected in the meat and milk trade. The second meeting will take place in the first half of 2007 in the Russian Federation.
The Russian prime minister took an unusual approach to answering journalists’ questions by dodging all questions about what exactly the parties had agreed on in the gas sphere. “All the questions are connected. I urge you not to take an interest in this one question, even though it is important,” Fradkov said, adding that “we couldn’t pass over this question, but in meeting for the third time we were not so obsessed with the gas price issue.” According to the Russian prime minister, this question was tackled by those who are personally holding the talks, and he hopes “they will come to terms.”
Does this agreement depend on any other circumstances? Fradkov readily revealed his opinion that “strategic cooperation envisages not only the ability to look ahead but also special trusting relations, common priorities in foreign and domestic policies, and at the level of international relations.” He stressed that “if we are talking about NATO, it should not bring harm to Russia.” However, he did point out that integration with NATO is the prerogative of Ukraine and its people. “If we are talking about the WTO, we have to take into account relations between the WTO and Russia as well as the desire to build up strategic and economic interaction in a bilateral format. We have to consult more, exchange more, and, I would say plainly, synchronize the negotiation process,” Fradkov declared, having expressed similar wishes concerning Ukraine’s European integration.
In his turn, the Ukrainian prime minister was consumed with the gas topic and discussed it in detail. Yanukovych told journalists, “The talks are ending in Russia. Volumes of gas to be supplied to Ukraine are being confirmed for at least 55 billion cubic meters at a price no higher than $130 for 1,000 cubic meters. As soon as the negotiators come to Ukraine, they will show these contracts,” Yanukovych said, explaining that the price is the subject of an agreement between subjects of economic activity. “Of course, we are creating the right conditions and a good atmosphere for our economic subjects to work efficiently,” he said, neither confirming nor disproving the assumptions expressed earlier by his opponents.
Prime Minister Yanukovych finally dotted all the i’s and confessed that this issue was very politicized before, but now both sides are endeavoring to put it into the economic plane. He added that the government will guarantee the volume of gas supplies to Ukraine and a reliable transit “so that the European partners do not feel uncomfortable.”
This very consideration seems to have been the reason for the successful gas talks. Reading between the lines, one can see that the issue is not so much the fact that this year Ukraine acted differently by creating gas reserves in its underground reservoirs as that it returned to a discussion of the problem of a gas transport consortium, wisely inviting not only Russia but Germany to participate in it.
Mykola Azarov, First Deputy Prime Minister and Minister of Finance, was not being underhanded when he refuted the announcement that Ukrainian government is ready to make political compromises in the gas talks. “Ukraine did not make any proposals of the kind. That’s all nonsense. Normal talks are going on. They are mostly focused on the economic plane. I believe that today we will witness significant progress,” Azarov said, as if looking into the future. The latest gas cycle consisting of a problem, followed by an acute crisis, sacrifices, and successful talks, is coming to an end.
