THE ACTION UKRAINE REPORT: AUR#648

New Moment Of Truth; Gas Intermediary RusUkrEnergo - Q A; Roof Top Boilers; UNICEF Winning Photo; Deal To End All Barters; Opera Moses

Wayne Rooney  |  by action-ukraine-report.blogspot.com. All rights reserved. 23.12 | 15:13
THE ACTION UKRAINE REPORT: AUR#648<p>New Moment Of Truth; Gas Intermediary RusUkrEnergo - Q A; Roof Top Boilers; UNICEF Winning Photo; Deal To End All Barters; Opera Moses</p>

In-Depth Ukrainian News, Analysis and Commentary Sports, Government, and Politics, in Ukraine and Around the World By Roman Kupchinsky, Investigative Journalist and Analyst Tom Warner in Kiev, Financial Times, London, UK, Thu, Jan 26 2006 Vilnius, Lithuania, in Lithuanian Thu, 19 Jan 06 BBC Monitoring Service, UK, in English, Wed, Jan 25, 2006

21 COMMENTARY: By Vladimir Milov, President of the Institute of AFX Europe (Focus), Moscow, Russia, Thu, Jan 26, 2006
24 Does Yushchenko really accept the new division of powers? voter support. So Yanukovych appears set fair to head the largest party in parliament, the Rada, following parliamentary elections on 26 March.

This would not bode well for further reforms. The Donetsk based party is backed by oligarchs, such as the Chief of Staff of the old Kuchma regime, Viktor Medvedchuk, and the ex-President's son-in-law, Viktor Rinat Akhmetov, owner of System Capital Management and reportedly Ukraine's richest man, will join the party as a prospective member of the Yushchenko's Our Ukraine party trails in third place with 11 per cent. These figures are unlikely to change dramatically.

That would leave no party with On these figures, the Party of the Regions will gain some 175 seats in the Rada while Tymoshenko will receive 95 seats and Our Ukraine 79. Socialists, the ultra left Vitrenko bloc, the Popular Party and the Communists should Her party would not support such a move. Ideological differences aside, slot.

Their recent unity on the No Confidence vote was a short lived that he needs her to push through his policies. For Yanukovych it was a Many of its members would defect to an opposition led by Tymoshenko. Our However, to obtain some form of political legitimacy and muscle Yushchenko's This is not impossible.

Tymoshenko was wounded by her dismissal in September 2005, but will feel honour was satisfied by her dismissal of the positions do not seriously diverge. Both believe broadly in the direction of reforms. Tymoshenko has said she will regard the Party of the Regions as her main opponents.

She still regards herself as being on Yushchenko's side. nous. This has not been a feature of his administration so far.

He approached reform as a technocrat, not a politician. He needs advisers successful change. So far, he has achieved little, save the squandering of months, and in no way represented a long term solution to this vexed issue.

No one knows better than Tymoshenko, a former energy billionaire, the Simply, Yushchenko must swallow his pride in March and ensure that his His choices are limited, but, if he fails to form such a coalition, there is Should the parties fail to reach agreement in the spring, the country's new Ukraine's new moment of truth is approaching by the week. -30- By Roman Kupchinsky, Investigative Journalist and Analyst

Q. What physical property does the Swiss company RosUkrEnergo (RUE)
own?

Does it own any gas fields in Russia or Central Asia, or any pipelines

in the former Soviet Union? What services does RUE provide? A.

RosUkrEnergo does not own any property except a few bank accounts,

pens, pencils, a few computers and some very expensive Mercedes sedans.
Most gas fields in Russia belong to Gazprom which owns the licenses to
extract gas from these fields. According to Russian law, only Gazprom is
allowed to sell Russian gas outside the borders of the former Soviet Union.

In Central Asian countries, gas fields are owned by those countries. None

of these fields are leased to RUE in either Russia or Central Asia. The pipeline from Central Asia is called the "Center" pipeline.

It transverses Turkmenistan, Uzbekistan, Kazakhstan and Russia to the

Ukrainian border and is owned respectively by the countries it goes through.
stations which pump the gas through the "Center" pipeline. RUE merely transit fee).

RUE does not have any technicians, any repair men or technicians to operate the compressor stations. . Q.

How is RUE paid for signing these documents and paying bills? A. The payment details for RUE were NOT included in the copy of the

4 January "agreement" which was released by Yulia Tymoshenko to the
press so all I can base my answer on is the old Eural Trans Gas agreement
I have a copy of and media reports.

contractual obligations by either side. It is an expression of intent and The original contracts between RUE and Gazprom and Naftohaz Ukraine,

signed in 2004, were never made public despite numerous vows on the part
of Putin, Kuchma, Yuriy Boyko, the head of Naftohaz Ukraine and Alexei
Miller, the head of Gazprom, that RUE was as pure and transparent as
mothers milk. According to media reports, RUE is to be paid in the same manner as its predecessor, Eural Trans Gas was paid - the Ukrainian side will give RUE
13 (or possibly 15) billion cubic meters of gas which RUE will then sell to Europe using the services of Gazexport, the foreign sales subsidiary of Gazprom.

RUE will make a profit of close to $2 billion by reselling the gas. Since RUE is registered in a Swiss Canton, it will only pay an agreed upon amount of taxes to the Canton. The Russian treasury will not see a penny in Q.

Why did Russia give RUE exclusive rights to be the sole supplier of gas to the Ukrainian border? Was there a tender? A.

There was no tender when RUE, or its predecessor, Eural Trans Gas,

were given exclusive rights to be the middleman in this arrangement.
Gazprom simply decided on what type of company it wanted, formed
the company, and signed an agreement with it. It is not clear if RUE pays Gazprom for this exclusive right.

In the Eural Trans Gas contract there was no mention of any fee paid to Gazprom for

this right. In reality however, part of the huge fees which RUE is paid by Q. Could not Gazprom or Naftohaz Ukraine have performed the same
services which RUE performs and saved a lot of money?

A. Yes, that is the main point of contention. Of course Gazprom could have done this without RUE as well as Naftohaz Ukraine.

There was no need to outside of Budapest, owned by an unemployed Romanian actress and a young in Tel Aviv who represented Semyon Mogilevich to be the owner of the

company and to have Dmytro Firtash ask this lawyer to please, do us a favor
this one time and help us transport Turkmen gas to Ukraine. Q. What value does RUE add to the Ukrainian-Russian gas deal?

A. None. All it does is act as a transmission belt for huge sums of money and a tax shelter for Russia's finest.

Its main assets are its bank accounts and close contacts to the Russian elite. RUE in reality is the alter ego of Tom Warner in Kiev, Financial Times, London, UK, Thu, Jan 26 2006 RosUkrEnergo, the Swiss-registered company that would become sole contracts and agreements that would finalise the deal, after Ukraine's Ukraine's prime minister, Yuri Yekhanurov, and Russia's deputy prime minister for energy, Viktor Khristenko, both described the problem as a minor hitch and said they were working on a solution. But others close to Alex Danilyuk, an adviser to Mr Yekhanurov working on the gas deal, said the pressure was growing with each delay, and he felt it would be better to slow We have a framework deal and it's working," he said.

venture with the state oil and gas company Naftogaz. But that part of the deal cannot go ahead without clearance from the anti-monopoly committee, which is headed by Olexy Kostusyev, who is running in March parliamentary Bohdan Yakymyuk, a spokesman for the committee, said its specialists were the company had not delivered the documents needed to clarify who, or which organisations, controlled RosUkrEnergo and what connections they had, if any, to other participants in Ukraine's gas market. whether we get the documents required by law," Mr Yakymyuk said.

However, Mr Danilyuk said RosUkrEnergo could retain the more important

role of sole supplier of gas to the Ukrainian border because Gazprom, the
Russian natural gas giant, had given the company exclusive rights to transit
gas across Uzbekistan, Kazakhstan and Russia. The delay came as Daniel Fried, a US assistant secretary of state, remarked energy conservation policies, which should be founded exclusively on an economic basis. The recent gas war, whether lost or won, has only made this problem more acute.

The major principle to follow here is that we must The old system has exhausted itself, and no European country today has such energy-intensive industrial and private sectors as Ukraine. Gas prices is wasted. In fact, heating plants are not heating buildings so much as the Back in 1999 I proposed a project for Vinnytsia, which could significantly improve the situation.

The project boiled down to building rooftop boilers to which several multistory buildings could be connected. This approach public utilities sector. Given the continuing technological progress, today's boilers are much more efficient than six years ago, which is why

the impact of this approach would be even greater today.

If a private company builds a rooftop boiler, its payback period will be government). At the same time, the quality of service will increase significantly. Consequently, this approach has a big future, which is why it The government's project to install plastic windows is praiseworthy.

After all, it takes six to eight times less energy to heat one square meter in a ordinary building. This task is up to the government because state utilities As for alternative energy sources, unfortunately, Ukraine is still at square For example, Austria, Germany, and many other European nations effectively use wind power plants to generate energy. Ukraine has ample space to build However, such a project would require appropriate government funding.

Our water resources potential has not been fully utilized either. We cannot Of course, this is a global problem and requires both government funding and private investments. I once spoke to Minister Baranivsky of the Agro-industrial Complex, who said that since fuel prices have gone up, it is Poland has built such plants, and Ukrainian farmers are successfully supplying them with raw materials.

Therefore, we simply must find investors environmentally friendly way. Some 60% of agricultural lands in Vinnytsia oblast are overgrown with weeds. Meanwhile, growing rapeseed on these lands would benefit both the industrial and agrarian sectors.

-30- The Day Weekly Digest in English #1, Kyiv, Ukraine, Tue, 24 Jan 2006 have?) become a sacred symbol of the unity of our political nation from Donetsk to Uzhhorod, from Chernihiv to Symferopol. This was Union Day, which will always be a reminder to contemporaries and their descendants of Jan.

22, 1919, when Kyiv's St. Sophia Square brethren in eastern Ukraine - Symon Petliura, Volodymyr Vynnychenko, and one. Two weeks later, on Feb.

5, 1919, Kyiv was captured by Bolshevik troops, who understood the unity of Ukraine as a purely nationalistic slogan not been attained in many respects. (We must admit this honestly and frankly because illusions, no matter how "rosy" they may be, lead to a dead end.) To answer this question, it is necessary to determine why the Ukrainian In spite of different views, most historians agree that the fatal role in the Ukrainian liberation movement was played by disunity, a maniacal (primarily, foreign ones) as among themselves for the coveted "mace," the symbol of power, and also by their inability to wisely and harmoniously resolve ethnic and social problems, which are the Scylla and Charybdis Dear reader, does this remind you in some way of contemporary developments?

The answer is all too obvious. For us Union Day is not a Moreover, it is a very pressing problem to find the principles that could unite western and eastern Ukrainians. (We must admit that here things have not improved much, to put it mildly, during the year in which the Orange government has been in power.

) absolutely all individuals no matter where they reside, whether in Donetsk or Lviv, and no matter what offices they hold (Immanuel Kant said that one narrow circle of individuals close to "the No. 1 person" makes all the period of time, and the people will inevitably proclaim a just verdict (for a lot (as a minimum) depends on me in our (not "this") country, because my children, grandchildren, and I have to live here. In my opinion, these are the principles that could bring together the Ukrainian political nation.

Readers can probably name quite a few others. This is the beginning of a very pressing and crucial dialogue. -30- His photo shows a street child in Odessa, Ukraine.

Yana made her way from Moldova, the poorest country in Eastern Europe, to the Ukrainian city. She died last Christmas addicted to drugs and infected with the HI virus. She was only 13 years old.

adolescents in many Eastern European countries. In no other region of the Approximately one per cent of the population is addicted to hard drugs. 1.

4 million have already contracted HIV, primarily young people are affected: 80 catastrophe in Eastern Europe. It is an appeal for our compassion.

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Keywords: Naftohaz Ukraine, Eural Trans, Central Asia, Union Day, Our Ukraine, Tom Warner, Soviet Union, Eastern Europe, Roman Kupchinsky
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