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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

SOUTHERN OIL TERMINAL: DISMISSED OUT OF HAND Who gives orders to the Premier in the election campaign?

3 March, 1998 - 00:00

On a campaign visit to Odesa oblast, Premier Valery Pustovoitenko wanted to know everything. A series of conferences were held on how to increase various production and freight transit capacities, including ammonia passing through Ukraine from Russia. But he asked no questions about the oil terminal being built at the southern port. Why?

Article 5 of the protocol adopted by the third session of the Joint Ukrainian-Russian Commission on Cooperation is almost entirely dedicated to Russian ammonia transit via Ukraine, but the document makes no mention of the oil terminal, because the project does not serve Russian interests. The Day reporter Mykhailo Aksaniuk quotes the Premier as saying that "this subject was not broached during the working visit." He blames this on the EBRD which, in his own words, is "delaying loans for the construction project."

Meanwhile, an informed source at Derzhnaftohazprom (State Committee on the Oil and Gas Industries) told The Day that talks with the EBRD were beginning to, but that the Ukrnaftoterm (Ukrainian Oil Terminal) Co., which is building the terminal, was causing problems. Its manager, Oleksiy Negreskul, has of late made himself unavailable.

Actually, the cabinet, Premier included, should be blamed for the bungled project as much as the stock company's head who has gone to the mat. Only recently Mr. Pustovoitenko demonstrated the utmost concern about the oil terminal, but has since shown complete ineptitude in coping with personnel and financial issues. By way of comparison, Russia invested $86 million in the renovation of the oil harbor at the port of Odesa, through which Russian raw materials are exported. Ukraine allocated $30 million for the project, which will more than likely go down the drain.

PS: The Financial Times reports that the Royal Dutch/Shell Group signed a protocol of intent with Ukraine, making Shell a co-owner of Ukraine's arterial oil pipeline network. Its total cost will be estimated in 6 months, determining Shell's investment. Preliminary estimates are around $1.5 billion. Analysts believe that Shell, if and when in control of Ukraine's gas transit to Western Europe, will have tremendous revenues on the Western European gas market and an additional lever in further business with Russia's Gazprom after signing last fall a contract on joint oil extraction.

 

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