The last energy barrier between the Russian Federation and the EU has been taken

Posted by Ivan Matiyeshyn on 16/11/12

“Gazprom” and Bulgaria have concluded the definitive investment agreement about the “South stream”. The document became the last necessary condition for the full coordination of the project of the pipeline with countries-participants.

“Gazprom” has predictably overcome the last barriers to the construction in terms of diversification of natural gas export routes. For the realization of the overland part of the project the Russian monopolist has in its disposition the signed intergovernmental agreements with Bulgaria, Serbia, Hungary, Greece, Slovenia, Croatia and Austria. Ukraine can write down all these countries into the core group of failures of its foreign policy.

The declared project capacity of the sea site of the gas pipeline will make up 63 billion cubic meters per year. And the approximate cost of construction of the whole gas pipeline is estimated around 15,5 billion euro, out of which about 10 billion euro is earmarked for the sea site. As for today it is basically not important where such volumes of gas will appear from. The main point is whether they are necessary for Europe which has decided to head for the reduction of consumption of the Russian gas. The reality of international relations is first of all dictated by the economic benefit. In this context Russia and Europe show the mutual approach in relation to Ukraine.

The question is different. All listed above countries simply don’t perceive Ukraine as the state in the geopolitical sense. Probably, the Ministry for Foreign Affairs of Ukraine has another thought in this respect. However, it depends on the present authorities which thanks to the parliamentary elections have received another term for the confirmation of democracy in the country.

Meanwhile, as for today Russia has all economic levers of influence upon Ukraine. Europe, in turn, is sure that it will receive the minimum necessary volumes of Russian gas through the gas-transport system of Ukraine. The previous accusations in “winter” thefts of gas by Ukraine testify to the realization of the long-term strategy of forcing it out, as the energy player. The last trump of Ukraine – the gas-transport system – becomes not topical. This process was promoted by the mutual tacit consent of Russia and Europe upon the unilateral buying up of all internal gas distribution networks of Ukraine. After the end of this process Ukraine as the state is going to be excluded from the negotiating process between Europe and Russia. It is always easier to conduct negotiations with several pro-ruling groups which know how to count money. It is easier to buy their assets which have already gone through all legislative coordination.

And average Ukrainians, as always, are historically doomed to suffer from another increase of tariffs for energy carriers.


The Agreement between ВР and Rosneft: Consequences for Ukraine

Posted by Ivan Matiyeshyn on 02/11/12

The strategic agreement between Rosneft and BP is mutually advantageous. Apart from considerable means, British receive stocks of the Russian oil monopolist and the guaranteed presence in the Russian market. And what’s most important, ВР gets access to the development of the Russian part of the Arctic shelf.

After the finalization of the agreement the head of Rosneft I.Sechin will receive the status of the generator of energy assets of Russia. Formally thanks to his efforts Russia has got another state oil monopolist of the Gazprom level. As the head of Rosneft and Rosneftegaz, he receives control over enormous monetary streams. The rates of privatization supported by the government will depend on him even more. It was foreseen earlier that a part of means of Rosneft would be directed at this initiative. It looks like terms, objects and parts of companies for the privatization will be changed. And the list of strategic energy enterprises can be refilled.

The consequences of the specified agreement will be tangible for Ukraine as well.

Firstly, the TNK-BP was an influential player in the Ukrainian market of oil products. Having changed the TNK-BP brand, Rosneft will be able to play with prices of oil products. Ukraine managed to diversify the majority of them. They were coming from the Baltic, Poland, Romania and Belarus. Using Rosneft, Russia will try to change the situation to its advantage.

Secondly, the monopoly right of Rosneft to the development of hydrocarbon deposits will entail the reorientation of the private Russian companies to the adjacent markets. The last initiatives of the heads of Gazprom and Rosneft on the prohibition of admission of these companies to the development of the Arctic shelf will strengthen this tendency even more. In Ukraine they will be interested in possible participation in the development of the Black Sea shelf. Rosneft can favor private Russian companies in this process. That is, control over their activity will spread on the projects connected with Ukraine as well.

Thirdly, Ukraine will receive additional political risks in relations with Russia. Advantages of Ukraine in case it joins the Customs Union can become more obvious. Especially, in terms of introduction of the preferential regime. From now on if necessary, Russia will be able to have an impact on the probable deficit of oil products in Ukraine even more. However, to gradually raise prices and receive super-profits is apparently more favorable, than to destabilize the situation.


Presidential elections in Ukraine – a new game of the EU and Russia

Posted by Ivan Matiyeshyn on 26/10/12

Parliamentary elections in Ukraine haven’t finished yet, and the EU already worries about the presidential elections. The overwhelming majority of the European observers don’t expect positive results from the elections to the parliament of Ukraine. Their honesty and transparency is doubted already. Over the last year the President of Ukraine hasn’t made any visit to Europe. And the main goal of the advertised visit to Russia at the end of October was the mobilization of the electorate.

It becomes more and more difficult for the European Union and Ukraine to hide the crisis of relations. Both participants understand that none of the parties can affect honesty and transparency of the electoral process. Thus, the EU – can’t do this, and the Ukrainian authorities – don’t want to. Hence, the European Union starts to connect the overcoming of this problem with the following elections. At least, meanwhile, with the presidential ones. Although, in case Europe doesn’t recognize these elections, Ukraine can get early parliamentary elections.

The number of supporters of such crisis scenario grows not only in Ukraine and the EU, but also in Russia. Since, today Ukraine isn’t perceived as a really independent international player even by Ukrainians. None of the present Ukrainian politicians has addressed the electorate with this idea. Everyone is limited to advances with the EU or Russia. In the majority of cases it takes place because of their desire to get their support already on the eve of the presidential elections.

None of the pro-ruling and oppositional politicians has asked the voter, whether he/she needs it. But we have speculations and advances with the electorate on the topic of foreign policy guidelines of Ukraine. Politicians consider they are spokesmen of people’s interests even having not built a meaningful dialogue with the Ukrainian people. Mercantile interests prevail. Superficiality and short-sightedness of politicians who already now see themselves as future presidents of Ukraine can be constantly observed. The only thing what present oppositionists do is only going to the EU countries and the US, pointing at the imprisonment of their leaders. Actually, banal PR is on the first place. Representatives of the authorities do the same thing. Using “diplomatic ignoring” of the first person of Ukraine, they try to present themselves in Russia as negotiators, or mediators. As a result, we have crisis of relations both with Europe, and with Russia.

We can ascertain that the specified international players start to show discontent with actions of the present Administration more and more strongly. And due to its weakness Ukraine again becomes the object of geopolitical games between the EU and Russia. And nobody is interested in the opinion of the Ukrainian society as always. And how wrong it is…


Ukraine-Russia Relations: a Myth about Multi-vector Approach

Posted by Ivan Matiyeshyn on 12/10/12
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The current Ukraine-Russia relations are overfilled with negative. The keywords which characterize them are risks and threats. The renewal of equal relations with Russia was the main slogan of the present Ukrainian authorities at the last presidential elections. It turned out that Russian elites aren’t going to justify optimistical hopes of Ukraine.

The historical Russian question “Who is to blame and what to do?” became topical for Ukraine as well. It is clear that Russia considers Ukraine to be guilty. Exactly due to the unwillingness of the latter to make concessions there periodically arise “cheese-dairy” wars. Among the last innovations is a mutual introduction of utilization duty for cars import. And certainly, an everlasting topic of revision of gas contracts of 2009. Experts of both parties offer different options of overcoming the consequences of these relations. However, the main reason of the crisis today is in the absence of interstate communications at the level of leaders of both countries. Disappointment in prospects of mutual relations can be noticed not only among politicians, but among ordinary citizens as well.

Among voters of the President of Ukraine the greater part supported making closer relations with Russia. The previous leader received a mandate of trust from supporters of integration with the EU. Both of them didn’t justify these hopes. Such division and support of 50 by 50 of both foreign policy courses of Ukraine is gradually getting exhausted. The Ukrainian authorities obstinately continue to trust in the myth about viability and efficiency of the multi-vector concept. However, economic and financial dependence of Ukraine on Russia continues to grow. The situation is complicated by the EU as well, which supports this concept by its own passivity. Russia makes use of it, bringing integration of Ukraine into the Customs Union closer and closer. With such a scenario, Ukraine has little time left to consider any forms of pressure upon it to be inexcusable…

The Ukrainian elites have already repeatedly imposed a choice between the Presidents to people, the consequences of activity of whom don’t coincide with their electoral slogans. However, the society expects that there will appear a new leader-manager for whom the well-being of citizens will be a unifying factor. And this is an enormous potential the future presidential elections have…


Toothless opposition will legalize aspirations of the authorities

Posted by Ivan Matiyeshyn on 06/10/12

There is less than a month left to the end of the parliamentary electoral campaign in Ukraine. Already today it is possible to predict that 5 political forces out of 22 which compete under party lists will get into the parliament. Among the favorites we can outline two camps. “Proruling-controlled forces” where the proruling Party of Regions, Communists and N.Korolevska’s and football player A.Shevchenko’s “Ukraine-forward” belong to, and the “Toothless Opposition”: Y.Tymoshenko’s “Batkivschyna” and “UDAR” of boxer V.Klychko.

The electoral campaign of the first camp is more similar to a political supermarket where everything can be sold and bought. Thus, the main prize is in the hand of the President – he aspires to get 300 votes for the constitutional majority. It looks like opponents, beginning their own campaign, even didn’t think of the national Ukrainian interest. The main objective of their leaders is to keep personal warm armchairs in the parliament.

These 5 political forces and the latent party affiliation of the future winners in majority districts promise to even more deepen the parliamentary crisis in Ukraine. It is possible to ascertain that coming back to the majority districts component worsened the situation with observing democracy in the electoral legislation even more. It is violated by representatives of both camps with cynicism. They follow a new informal “electoral law” “about business-parliamentarism”.

The overwhelming majority of other political parties, which are present in the electoral ballot, are branches of the proruling camp which provide the majority in counting commissions. Political forces which participate in elections for the first time aren’t ready to pay such a price for getting into the parliament. Such principle is also professed by the Native Fatherland Political Union, which prefers to be loyal to the interests of its supporters.

This electoral campaign has every chance to get into the Ukrainian Guinness Records Book by the quantity of present international observers. However, to acknowledge infringements – doesn’t mean to make Ukraine democratic. To hope for the last day is naive. Politicians don’t think of irrevocable losses for the development of a civil initiative in Ukraine. But the majority of the Ukrainian voters know the value of proruling and opposition forces.

The electoral campaign-2012 once again demonstrates that citizens of Ukraine are artificially limited to the choice between two camps. Indeed, the political system with two political camps has formed in Ukraine. The today’s power is interested in the confirmation of such variant of the “two-party” system. With the tacit consent of Europe, none of them is the spokesman of interests of the Ukrainian society. A germinal state of civil society again comes in the way of the emergence of the third force. It is necessary to understand that all democracy was destroyed half a year before by the Electoral Law.


“Antimonopoly” game of the Eurocommission with “Gazprom” for gas

Posted by Ivan Matiyeshyn on 19/09/12
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On September 11 President of the Russian Federation V.Putin signed the Decree which limits the international activity of Russian strategic companies. It became “the Russian answer” to the decision of the Eurocommission which started an investigation in terms of the Russian monopolist on suspicion in violation of the antimonopoly legislation of the EU. In particular, the Decree forbids the state companies and their “daughter companies” to conduct some market transactions, and also to provide information on the activity without its permission, without coordination with a federal governmental agency. And the government is to decide which one it will be within a month.

The signed Decree is an attempt to transfer the conflict into the political plane. Thus, Russia isn’t going to listen to the initiatives of the Eurocommission on the necessity of Russia’s revision of the now-operating gas contracts with the European countries. The leadership of Russia continues to publicly ignore the main problem, – inevitability of reduction of gas export to Europe. Confrontation between “Gazprom” and the EU will have the further public continuation. In the nearest future, Russia will conduct a successful informational “operation” on inclusion of Ukraine into the conflict, with an obligatory transferring of all weight of negative PR upon it. To distance itself from the conflict with the EC, Russia will count on the diversification of gas deliveries to the Asian markets. Anyways, the informational campaign on the support of such initiatives promises to be large-scale and long-playing. And this is despite considerable problems with the realization of plans on the expansion of the Russian presence at the Asian gas market.

The situation around the conflict between the EC and “Gazprom” on gas contracts will lead to the complication of relations between Russia and the EU in other directions of economic cooperation and will negatively reflect upon prospects of relations on the whole. “Gazprom” can feel the problem of the lack of means and technologies for the development of new and previously declared deposits more and more tangibly. The main point is in the reduction of taxes, especially regarding the extraction and export of raw materials. Hence, “Gazprom” will be simply compelled to make the choice in favor of domestic or international oil and gas companies in the near future. And in some projects it will even combine participation of both parties. Otherwise, “Gazprom’s” future as the gas monopolist is up in the air. However, if earlier this had to do exclusively with export prospects in Europe, from now on issues of its monopoly position have to do with the internal gas market as well. Anyways, “Gazprom” will be necessary to the leadership of Russia for a long time, as a company for disbursement of foreign investments and budgetary funds, and also write-off of debts and economic failures of the nation-wide scale. There is a threat that this state strategic object of Russia, despite logic, will continue to further acquire debts. However, there is a probability that it will be unable to adequately react to changes of the conjuncture both at the European and at the world gas markets.


“Gazprom” losing positions – an affair or planned action?

Posted by Ivan Matiyeshyn on 05/09/12
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On August 29 Gazprom’s representatives have officially recognized impossibility of the Shtokman project implementation. Since 2007 Russia has been trying to implement the idea of gas production from the Shtokman field. Stocks estimated by Gazprom were astonishing – 3,8 trillion cubic meters of gas and 53,4 million tons of condensate. However, nothing went further than application of funds.

In the course of 4 years the operator of the project, Shtokman Development AG (51% – “Gazprom”, 25% – “Total”, 24% – “Statoil”), spent about 1,5 billion dollars. However, the term of gas production was constantly postponed. And this time participants of the project recognized that at this stage the implementation of the project is simply impossible. Earlier, the parties named different approaches to the way of gas production and transportation as the official reason of continuous postponement. However, the main reason of delay of the project became precisely the uncertainty with future deliveries and price of gas. In addition, expenses needed for the realization turned out to be too huge. Earlier, investments into the project were roughly estimated around 30 billion dollars.

From the moment of start of the Shtokman field development, the demand for gas in Europe has been constantly decreasing. And in the next years “Gazprom” will face the problem of sale of gas in the countries of Europe. The situation is also complicated by the reorientation of the US for LNG export to Europe which is expected in 2016. These problems became the subject of concern of the Russian government. According to Russian mass media, the Ministry of Economic Development of the Russian Federation doubted the efficiency of Gazprom’s investments. It is possible to disagree with this; however, the “freezing” of the Shtokman project is indicative in this case. After all, despite possible speculative influence of the specified event upon Gazprom’s stock value, reputational losses for Russia can be a lot more tangible. And in that case changes of a business model in the approach to Shtokman field development won’t be of help any more. And the entry of new partners, such as Shell or ExxonMobil, won’t cure the situation as well.

Today, the loss of positions by Gazprom as an export monopolist (both in Europe and in Ukraine) already lies on the surface. The same thing has to do with the internal Russian market, where the part of gas supply by independent gas producers is constantly growing (following results of the last year – to 25%). Anyways, Gazprom needs to undergo high-quality changes. And the thing is even not in the replacement of the top management of the monopoly or structural changes. The company needs to become “more liberal” taking into account the world environment of the energy market. It will be already impossible to ignore the development of LNG-technology and the influence of the “shale” component.


Elections-2012: losing the last signs of democracy in Ukraine

Posted by Ivan Matiyeshyn on 16/08/12
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On August 13 the submission of documents to the Central Election Commission for registration of party lists and candidates in majority districts has officially ended in Ukraine. According to the legislation, already on August 20 all participants of the electoral process, who will start their pre-electoral campaign the next day, will become known.

The main distinctions of the parliamentary elections-2012 from the previous ones are as following. Firstly, the right to nomination of candidates is possessed only by political parties and citizens by means of self-nomination. Secondly, the electoral system became majority and proportional. That is, a half of MPs will be elected in majority districts, another half – by lists of political parties. Thirdly, the electoral threshold for political parties to pass to the Verkhovna Rada of Ukraine makes up 5%. Cancellation of the option “I do not support any candidate or party” in the ballot became another important innovation.

According to the data provided by the Central Election Commission, 22 political parties out of 202 registered in Ukraine will participate in the parliamentary elections-2012. MPs, who can get into the parliament of Ukraine through majority districts, represent interests of 87 political parties. Native Fatherland Political Union will participate in the parliamentary elections in Ukraine for the first time. It is quite a new group of adherents, who founded this political association in May, 2010.

Already before the official start of the electoral campaign the main candidates for getting into the parliament were known. Their circle is clearly limited. These are only 5 political forces. Among them we can see the pro-ruling forces: the Party of Regions, the Communist party and “Ukraine – Forward!” party of Nataliya Korolevska and football player Andriy Shevchenko. Another two parties, although they publicly criticize the authorities, have doubtful oppositionists in their lists, who go to the parliament to preserve and protect their business. These are pseudo-oppositional parties: “United opposition” (Y.Tymoshenko’s “Batkivschyna” + A.Yatsenyuk’s “Front for change”) and UDAR party of boxer Vitaliy Klychko.

The unique character of these elections will consist in discrepancy of percentage won by these parties and real support their declared ideas have among Ukrainian voters. The fact that the last two forces avoid the subject of eurointegrational aspirations of the part of Ukrainian society in the electoral propaganda is indicative. They lost the trust limit. Today, about 54% of Ukrainians support Ukraine’s accession to the EU. I hope that official representatives of the EU will more meticulously treat the non-fulfillment of eurointegrational promises by representatives of the political establishment which will receive MPs’ mandates. The course of these parliamentary elections will again certify the tendency of democracy winding down in Ukraine. There are no doubts that elections won’t be transparent and will have numerous violations. The principle of people power/democracy in Ukraine is being leveled. The state starts to lose democratic and legal signs. I hope this time the people of Ukraine will give a chance to new political forces to change the situation, and will also demonstrate a balanced civic stand which will be heard and supported by the European community. Since, there are practically no guarantors of democracy left in Ukraine.


Requiem over the Ukrainian parliamentarism

Posted by Ivan Matiyeshyn on 08/08/12
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Since the very beginning of Ukrainian independence citizens of Ukraine have always treated governmental institutes with vigilance and mistrust. However, apparently it is the first time in Ukraine that the number of the dissatisfied with their activity has reached critical limits. According to July sociological surveys, 71% of the population of Ukraine doesn’t trust the parliament. Only 7% trust the parliament.

Violation of procedures and laws during the adoption of draft bills has practically become new unofficial regulations of the parliament. And voting with cards when their MPs-owners are absent in the parliamentary hall is perceived as a norm now. Moreover, the President of Ukraine has repeatedly put his signature under the bills adopted in such a way.

It was long before the start of the electoral campaign of 2012 that the current composition of the parliament made maximum effort to discredit the very existence of parliamentarism in Ukraine. “Pseudo-oppositional” political powers were more concerned with the struggle for leadership, or getting guarantees they will get into the following composition of the parliament. They prefer to forget about representation of interests of citizens in the representative body right after the end of elections. Protection of their business interests is always on the first place. Nobody is talking about the culture of parliamentarism. And by the way, it consists of the awareness of need of continuous dialogues between the power and civil society. In turn, a dialogue without trust is impossible.

The start of the present electoral campaign has once again demonstrated inability of the today’s oppositional forces to consolidate their electorate around themselves. With catastrophic political apathy of citizens being in place, Ukraine will have a parliament which will only lobby interests of the big business. It will inevitably lead to the crisis of legitimacy of the very essence of parliamentarism in Ukraine. The change of the Constitution can become a reality already at the beginning of 2013. And it is quite possible that these changes will have to do with the form and essence of election of the following president – it will be a lot simpler to do it in the parliament. And what will be left for the citizens of Ukraine is only watching an illegitimate parliament nominally “electing” the president.

Democracy in Ukraine is becoming a mere phrase. …


Parliamentary elections in Ukraine – everything is settled?

Posted by Ivan Matiyeshyn on 06/08/12

According to the legislation of Ukraine, the parliamentary electoral campaign has started on July 30. The elections, which will take place on October 28, are conducted by the mixed system – 225 members of parliament (MPs) are elected by party lists and 225 – in majority districts. Already on August 20 all registered candidates, both in party lists and majority districts, will become officially known.

The electoral threshold for parties is 5%. Today two political forces have the greatest electoral support in Ukraine: the Party of Regions and the “United opposition” (Tymoshenko’s “Batkivschyna” + Yatsenyuk’s “Front for change”). According to averaged data of Ukrainian sociological services, they have on average 23% of support of voters each at the start of the electoral campaign.

The main feature of the parliamentary elections is the system of counting votes which basically isn’t independent and transparent. Therefore, we will have 3 results: the number of voters ready to vote according to sociological forecasts, the number of those who did really vote and the number of bulletins which will turn out to be in ballot boxes.

Two more political forces can theoretically get through to the parliament. It is UDAR party of boxer Vitaliy Klychko (7%) and the Communist party of Ukraine (6%). Despite the rating of “UDAR” party, this force will hardly “be allowed to get” into the parliament. Klychko isn’t ready to compromises.

The party of N.Korolevska “Ukraine – Forward!”, which declares liberal views, and the All-Ukrainian Union “Svoboda” led by the supporter of national ideas O.Tyagnybok yet fall short of threshold 5%. However, after the world-famous football player A.Shevchenko entered the party list of “Ukraine – Forward!”, the chances of this party to get into the parliament have considerably grown.

However, with the date of elections coming closer, the results of surveys of Ukrainian sociological services start to get pre-paid and manipulative signs. Forecasts of political scientists also differ very much, and participation of well-known athletes transforms elections into the “Ukrainian Olympic Games” – the main thing is participation.

We can note that the leadership of Ukraine is interested in the guaranteed passing into the parliament of 4 political forces. It is the “United opposition”, which has a real support at the level of 18-21% (which is about 90 seats in the parliament according to party lists), the Party of Regions – 14-16 % (70), “Ukraine – Forward!” – 8-10% (40) and the Communist party – 6-8% (25). Regardless of censorship, the press is full of messages about “Ukraine – Forward!” being the project of the Presidential Administration. Although, certainly, no proof will ever be found.

The main polemic of these elections takes place around the formation of the constitutional majority consisting of 300 MPs for the change of the Constitution in favor of the further increase of powers of the Presidential power vertical.

For the legislative and political balance opposition needs to win over 150 mandates. Meanwhile, this is only slogans, dreams and ambitions. And people continue to look for new forces.