Translated material
Oil Turn
A new space was created in Kyiv
Today, Polish President Lech Kaczynski will take part in the celebrations of Georgian Independence Day in Tbilisi. The day before, the Polish president and the heads of the three Baltic states called on the European Union to discuss the situation in Georgia. The presidents of Poland, Lithuania, Latvia and Estonia made this statement after a meeting at the energy summit in Kyiv with Georgian President Mikheil Saakashvili, who asked them to prevent an armed conflict between Tbilisi and Moscow.At the energy summit that ended on Friday in the Ukrainian capital, politics clearly dominated economics. The Polish president demonstrated his role as a regional leader in every possible way. On the way to Kyiv, the head of the Polish state stopped in Vilnius, where he took his Lithuanian colleague Valdas Adamkus on board. Then in Riga they were joined by two more important passengers: the presidents of Latvia and Estonia - Valdis Zatlers and Toomas Hendrik Ilves. Pan Kaczynski was gracious to the end and after the summit he took his Baltic colleagues home - before landing in Warsaw, the Polish president's plane made landings in Tallinn, Riga and Vilnius.
Lech Kaczynski could feel himself in control of the situation. It was on his initiative that a year ago the first energy summit was held in Krakow, which set as its goal ensuring the “energy security” of Europe from Russia through the construction of alternative pipelines. In October 2007, Vilnius took up the baton, and in Kyiv the “alternatives” gathered for the third time. The summit meeting was preceded by an energy forum, which was intended to justify the adoption of important decisions and documents. And the composition of the main characters has become noticeably wider - in addition to the presidents of Ukraine, Poland, Lithuania, Latvia, Estonia, Azerbaijan and Georgia, representatives of Kazakhstan, Slovakia, Bulgaria, the USA and the EU came to Kyiv.
The host of the forum, President of Ukraine Viktor Yushchenko, called for taking a unified position on energy issues in order to obtain a stable and united energy market. “The problems concern each of us, because oil and gas today are often used as a political tool,” the Ukrainian president said, and it became clear to everyone who he meant. The influential Polish Gazeta Wyborcza entitled its commentary on the summit “Against Russian Blackmail.”
The event participants signed a declaration on the creation of the Caspian-Black Sea-Baltic energy transit space. Viktor Yushchenko assessed this event as “a colossal success of the summit.” A joint working group will be created to develop principles for the functioning of a single transit space, which will present the first report at the next energy summit in November this year.
“Holding such summits can be perceived as a natural desire of countries importing energy resources to diversify supplies of oil and gas,” Adam Eberhardt, head of the analytical department of the Polish Institute of International Affairs, told Vremya Novostei. - Another thing is that, against the backdrop of Russia’s absence from the summit, it is immediately clear to whom they are looking for an alternative. But Russia, having turned off the tap to its consumers several times, itself gave rise to turning an economic problem into a political one.”
As at previous energy summits, the main topic in Kyiv was the continuation of the construction of the Odessa-Brody oil pipeline through Plock to the port of Gdansk in order to gain access to consumers in Western Europe. Now the oil in the operating area is moving in the opposite direction. Ukraine leased an oil pipeline built back in 2001 to TNK-BP, which exports Russian oil to the West through it. All this time, Warsaw and Kyiv have been unable to develop a convincing economic justification for the project. To prove its profitability, “not only must future consumers from EU countries be taken into account, but alternative suppliers of the “black gold” must also be attracted, says Mr. Eberhardt.
However, hope for Kazakhstan collapsed last year in Krakow, where President Nursultan Nazarbayev refused to come. Now filling the pipeline with Caspian oil will depend on Azerbaijan, which has become the main potential supplier. Although President Ilham Aliyev confirmed the supply of oil for the Polish-Ukrainian oil pipeline, he stated the need to wait for an assessment of the profitability of the project. It is expected in July. For now, Baku offers to supply 5 million tons of oil annually, but in order for the notorious oil pipeline not to be unprofitable, three to four times more raw materials are needed.
Nevertheless, after the summit, President Yushchenko confirmed that already this year Ukraine will change the direction of pumping oil through the Odessa-Brody pipeline. According to him, until the pipeline is extended to Polish territory, it will be possible to pump Caspian oil to Europe through the Druzhba pipeline, which is adjacent to the Odessa-Brody oil pipeline. According to Yushchenko, the summit also discussed the possibility of building a modern oil refining complex in Ukraine, which would receive Caspian oil.
“Now Poland receives almost 100% of its required oil from Russia. Even if the Odessa-Brody oil pipeline is completed to Gdansk, this will not radically change the overall energy picture in the region, Adam Eberhardt noted to Vremya Novostey. “Russia’s role as the main energy supplier to Europe will remain.”