ANALYSIS

Chernomyrdin speaks on allegations of gas diversion

by Michael Lelyveld
RFE/RL Poland, Belarus and Ukraine Report

Viktor Chernomyrdin, Moscow's new envoy to Ukraine, has defended the country against charges that it is diverting Russian gas. But the statement may only raise more doubts about Russia's Gazprom and the gas giant's role in the near abroad.

Speaking on June 14 at a press conference with Ukrainian Prime Minister Anatoli Kinakh in Kyiv, Mr. Chernomyrdin said Ukraine is no longer taking Russian gas from pipelines that traverse the country en route to Europe.

The statement from the former Russian prime minister came 10 days after Gazprom accused Ukraine of continuing to siphon gas and selling it to Poland illegally.

Last week, Interfax reported that Ukrainian President Kuchma reacted angrily to the charge, saying, "Ukraine has not violated the gas delivery terms a single time."

The state-owned gas company Naftohaz Ukrainy followed with a more qualified statement, saying that it has not allowed any siphoning since last June and that none took place during last winter's heating season.

The company's statement stopped noticeably short of Mr. Kuchma's blanket assurance that Ukraine had never taken any unauthorized gas.

Last August, President Kuchma told the German news magazine "Der Spiegel" that "Moscow is pumping over 130 billion cubic meters (of gas) per year to the West through our country." Mr. Kuchma asked rhetorically: "What's an odd billion siphoned off compared to that?"

Mr. Kuchma also glossed over an incident in January, when Ukrainian power companies admitted taking Russian gas rather than submitting to a complete cutoff by Gazprom's trading partner Itera.

The various versions make it hard to tell who speaks with authority about a problem that has roiled relations between the two countries for the past decade. The siphoning has also become an energy security issue for Europe, which relies on Russia for one-fourth of its gas. Over 90 percent of the fuel flows through the former Soviet lines in Ukraine.

Ambassador Chernomyrdin, who once served as Gazprom's chairman, seems to have overruled current board member Yurii Komarov, who cited Ukraine for the diversions the week before.

It is unclear whether Mr. Chernomyrdin is speaking for Gazprom or only representing the interests of the Russian state, which owns a 38 percent stake in the gas giant. The Russian government often treats any debt to Gazprom as its own, while Gazprom regularly acts as a foreign policy arm of the state in the near abroad.

It also seems odd that it would take President Kuchma over a week to react to the charges lodged publicly by Mr. Komarov. Ambassador Chernomyrdin has been holding talks on key issues, including the merger of Russian and Ukrainian power grids and joint use of pipelines, the RIA-Novosti news agency said. The events suggest that the siphoning claim is being used as a tool in Russia's bid to control the pipelines. Moscow has been working a two-track strategy by negotiating with Poland for a new pipeline route to bypass Ukraine. Poland has put off its approval and sought concessions, while Russia has kept up its pressure on Ukraine. Moscow's message to Warsaw is that it may obtain control over the old route and not need Poland after all.

Gazprom's mysterious ways have been compounded by its accounting of Ukraine's debt. Last week the company said that Ukraine owed it $2.5 billion, an increase over previous estimates of $2 billion. But the Petroleum Argus newsletter noted that Gazprom has not sold any gas directly in Ukraine for the past two years.

The sales have been handled by Itera, raising the question of whether Gazprom is counting Itera's debts as its own. The two have denied ownership links, despite widespread skepticism. It is unclear whether Ambassador Chernomyrdin is acting in the interests of either company, neither, or both.

Mr. Chernomyrdin's son is said to own stakes in companies that have benefited from Gazprom business. According to disclosures in Gazprom's annual report, the ambassador's children are "significant" shareholders in Stroitransgaz, a Gazprom pipeline contractor, the Financial Times said last week.

In the meantime, Agence France Presse reported that Gazprom's new chief executive, Aleksei Miller, is interested in selling up to 5 percent of the company to Royal Dutch/Shell, the leading competitor for the Ukrainian pipelines. A combination of interests could leave Kyiv with nowhere to turn.

While questions go unanswered, Russia's strategies seem to be taking a toll on Ukraine, raising the chance that it will soon make a deal for its pipelines with Moscow.

Michael Lelyveld is an RFE/RL correspondent.

Copyright © The Ukrainian Weekly, June 24, 2001, No. 25, Vol. LXIX

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