Time to Pay the Piper

This trip much resembled a fire fighting company, for Russia had cut gas supplies to Ukraine by 37% - of course, for debts and as a kind of punishment for pilferage of Russian gas being transported to Europe.

The delegation assesses as a great success the agreement reached with Russia's Gazprom during the blitz visit. Firstly, the Ukrainian goods delivered as payment of debts will be received at Russian market prices, not at the prices of respective Russian producers which are substantially lower than in Ukraine. Secondly, Naftohaz Ukrainy will only cover $410 million out of $1.4-billion in Ukrainian gas debts. The rest is to be paid by mutual settlements via such Gazprom-related structures as the Itera Corporation, Rosgaztrans Ltd., and Gaztransit.

Meanwhile, Gazprom official spokesman Mr. Yezhov told the Oil Information Agency March 3 that Ukraine's total debts (fines and penalties included) reached $1.6 billion. In his words, Ukraine and Russia struck a deal late last year that $500 million worth of goods and material resources plus Gazprom-bound gas turbines would be supplied as repayment of the debts. However, at the present stage Ukraine has only offered $300 million, including the turbines. "The talks are going far from smoothly" and there is still a long way to go, said the spokesman.

PS: Next in line is a fire fighting trip to Turkmenistan. According to Valery Pustovoitenko, Ukraine already owes $49 million to that country which has just resumed deliveries of natural gas.