Friday, March 6, 2009

Russia threatens gas war with Europe.

Interesting article that delves into the shadowy, twisty world of Eastern European business, politics, and good ol' cutthroat corruption.
Russia's prime minister, Vladimir Putin, today raised the spectre of a new gas war in Europe and warned that Russia could cut off supplies to European consumers unless Ukraine paid its gas bill by Saturday.

Putin said that if Kiev failed to pay there could be a repeat of January's gas war, which saw much of Europe shivering without Russian gas. There would be "a suspension of the supply of our fuel both to consumers in Ukraine and to consumers in Europe," Putin told his government.

Naftogaz, Ukraine's state-owned gas company, claimed this afternoon that it had paid its debt for February to Gazprom, Russia's state energy company. Gazprom earlier said it had received $310m (just under £220m) but was still owed $50m.Ukraine now has to settle its bill every month.

Putin's threat follows a raid yesterday by armed secret service agents on the Kiev headquarters of Naftogaz.

The raid is part of a bitter power struggle between Ukraine's president, Viktor Yushchenko, and the country's prime minister, Yulia Tymoshenko.

Yushchenko, who controls Ukraine's SBU security service, ordered the raid in an apparent attempt to seize the contract signed by Tymoshenko and Putin, which ended January's gas war.

The deal with Gazprom led to the resumption of transit gas supplies to Europe after Ukraine agreed to pay a price for its own gas approaching market levels.

Yushchenko is now trying to sabotage the deal in an attempt to undermine Tymoshenko, his former ally turned bitter adversary, analysts suggest.

The Putin-Tymoshenko deal eliminated the shadowy intermediary company RosUkrEnergo – whose owners have allegedly agreed to back Yushchenko's attempts to win re-election in next year's presidential election, they add.

Tymoshenko has furiously accused Yushchenko of corruption. Yesterday she criticised the raid on Naftogaz and said that the security forces loyal to the president were "out of control".

"The SBU is blatantly breaking the law and the president is covering up for them," she said, adding that the raid violated the constitution.

This morning a group of unarmed men turned up at the offices of Ukrtransgaz, the company that runs Ukraine's pipelines.

According to Naftogaz, the group left the company's premises an hour later after a standoff with members of parliament who had rushed to the scene. An SBU spokeswoman, Maryna Ostapenko, said its officers were conducting a criminal investigation into "abuses in the gas sector".

Yushchenko accuses Tymoshenko of effectively stealing $5bn worth of gas, transferred from RosUkrEnergo and gifted to Naftogaz.

And so on and so forth...

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