RosUkrEnergo, the Swiss-registered intermediary owned jointly by Russia’s Gazprom with two Ukrainian businessmen, billionaire gas tycoon Dmytro Firtash and his partner, Ivan Fursin, has enjoyed the privilege of exclusive gas supplies to Ukraine since 2004.
Aside from depriving Ukraine’s state-owned Naftohaz of revenues from domestic sales of gas and exports to Europe, it is widely believed that the arrangement created a huge slush fund that went to pro-Moscow pet projects, such as the Party of Regions. This party is also heavily influenced by lawmakers and powerbrokers close to the businessmen who profit from the Gazprom relationship.
But if money is being diverted through such schemes to interfere in Ukraine’s domestic policy, this is a national security risk. It is no surprise, therefore, that the United States has called openly for the removal of such opaque schemes.
Prime Minister Yulia Tymoshenko, the Kremlin’s new favorite, has apparently succeeded in cutting the RosUkrEnergo middleman out in a deal struck on Oct. 2 with her Russian counterpart, Vladimir Putin. The new deal calls for direct sales between Gazprom and Naftohaz, starting in January.
But, in order to remove the third-party scheme, the agreement requires a debt settlement of $2.2 billion between RosUkrEnergo and Gazprom. Tymoshenko said she was going to settle the debt by selling off some of the gas that belongs to RosUkrEnergo and that is stored in underground facilities. It is strange, but no stranger than your typical Russian-Ukrainian gas deal.
The next step would be to clarify precisely how much more Ukraine will be paying for natural gas imports next year, and thus, what the shock will be for the country’s still-fragile economy. Tymoshenko, who knows the ins and outs of the business from her gas-trading days in the lawless 1990s, should continue to be Ukraine’s envoy to Moscow. She seems to be in the best position to strike the best deal.
The logical question is: What is expected of her in return? Is the Orange Princess, formerly the Gas Princess, going to give up her pro-Western rhetoric in exchange for cheap gas and political support from the Kremlin? If that is the case, the nation is about to see a new, pro-Russian Tymoshenko rise from the ashes of the Orange coalition.
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