Oil Card in Game of Politics

It is no mere coincidence that two reports arrived almost simultaneously. The first: well-known Russian businessmen and (less known) politicians Boris Berezovsky and Vladimir Potanin are coming to Ukraine. The second: the State Property Fund announced non-commercial bidding for a 40% share stock package in the giant Lysychansk refinery.

In this connection it may be reasonably assumed that the summit for support of Ukrainian entrepreneurs will present for President Kuchma an opportunity to make promises to representatives of Russian business (the only persons from and through whom the financial part of the support promised by Yeltsin will flow to Ukraine) for their vote of confidence.

The Lysychansk refinery is likely to be chosen for this. Russia laid its envious eye on the refinery long ago, but so far the Ukrainian Parliament has resisted the privatization of the industry giant by Russian structures.

Perhaps the time has come. The visit of Berezovsky and Potanin, the uncrowned oil kings of Russia, usually at permanent war with each other for Russian property, signifies their willingness to reach mutual agreement in the division of Ukrainian property.

As a matter of fact, they are the only figures big enough to swallow such a piece of pie. Apart from the fixed price of 40% block of shares (Hr 60 million), the buyer must provide 1 million tons of oil or $100 million within 10 months after the tender, redeem (along with the other share holders) $100 million worth of foreign debt (by the year of 2000, plus interest), repay loans to domestic creditors ($67 million within three years), and loan arrears. But most important is that for the first seven years the purchaser of the block of stock will have to supply at least 4 to 6 million ton of oil to the plant annually.

It would seem that there is nothing we could blame the President or SPF for. If the state repays its debts and puts an idle plant to work, everyone only benefits. But there is a snag. When Ukraine was strong enough to restrain the expansion of Russian privatization to the Lysychansk refinery, the construction of an alternate refinery was announced in Russia. And so far Kyiv has received no assurance that the decision was canceled.

According to The Day expert Anatoly Novyk, basically sound proposals with regard to privatization of the plant were made to Ukraine long ago. Why are they being implemented only now, on the eve of the Parliamentary and Presidential elections? Why was it necessary to drive the plant, like the whole of this country, into debtors' prison? Is it because support must be paid for?

Photo AP:
And what does Borys Abramovych think about all this?