Translated material
Sevastopol discount
Russia and Ukraine have concluded a long-term geopolitical deal
Up to $4 billion annually for ten years - approximately the same amount Russia will pay for the eternal friendship of Ukraine and at least a 32-year stay of its fleet in Sevastopol. However, we cannot exclude other preferences for Moscow that Kyiv will provide.Yesterday, the chairman of the board of Gazprom, Alexey Miller, and the head of Naftogaz of Ukraine, Yevgeny Bakulin, signed amendments to the contracts concluded on January 19, 2009. Starting from April this year, Ukraine will receive Russian gas at a 30% discount, while the discount cannot exceed $100 per thousand cubic meters. In 2010, the discount applies to the volume of 30 billion cubic meters that Naftogaz must purchase from April to December. Starting next year, the discount will apply to gas volumes of 40 billion cubic meters. Despite the fact that the contract volume is 52 billion cubic meters, and Naftogaz’s obligations for selection according to the “take or pay” rule are 41.6 billion cubic meters.
Thus, in the second quarter, Ukraine will receive the desired discount of $100 and, instead of $330 per thousand cubic meters, will pay Gazprom $230. True, it will not be paid by the gas corporation itself, but by the state budget, since the government will simply release Gazprom. from paying export duties in the amount of up to $3 billion in 2010 and up to $4 billion in each subsequent year.
This is exactly what the new Ukrainian government dreamed of. Deputy Prime Minister Sergei Tigipko said on the eve of the deal that a gas price of $230-$240 would make it possible not to increase gas prices on the domestic market and at the same time remove Naftogaz and the Ukrainian budget from financial pressure.
Russian President Dmitry Medvedev, who arrived on an emergency one-day visit to Kharkov, called the agreement reached “unprecedented.”
In return, Russia obtained from Ukraine an extension of the agreement on the presence of the Russian Black Sea Fleet in Sevastopol for 25 years, starting from the end date of the current agreement, that is, from 2017. The agreement provides for an automatic extension for another five years if one of the parties does not object to this. By the way, the automatic extension for five years was also provided for by the current fleet agreement. Thus, theoretically, the Russian Black Sea Fleet will be able to be based on Ukrainian territory at least until 2042. However, gas discounts will last ten years - three times less than the new period of stay of the Black Sea Fleet in Ukraine. So military gas trading between the two countries can resume in the foreseeable historical future.
“We have suffered through these decisions on both sides,” Ukrainian President Viktor Yanukovych said yesterday. “We have implemented the first of the most important projects necessary to restore good relations,” Mr. Medvedev agreed. For this purpose, he flew to Kharkov for just a few hours.
By the way, if the Russian authorities sacrificed only the price of gas for the sake of this deal and are unlikely to experience problems with critics of this agreement, then official Kyiv will probably face legal and political battles with the opposition, which immediately began to talk about violating the country’s constitution. Article 17 of the Constitution of Ukraine states: “The placement of foreign military bases on the territory of Ukraine is not permitted.” However, the constitution itself (“Transitional provisions. Clause 14”) states that “the use of existing military bases on the territory of Ukraine for the temporary stay of foreign military units is possible on lease terms in the manner determined by international treaties of Ukraine ratified by the Verkhovna Rada of Ukraine.”
The final decision on extending the stay of the Russian Black Sea Fleet in Ukraine must be made by the parliaments of the two countries, the Department of Information Policy of the Ukrainian Foreign Ministry said yesterday: “In accordance with the provisions of the signed agreement, it will come into force only after its ratification by the parliaments of both countries and the completion of the relevant domestic procedures.” .
As for the gas deal, as Gazprom head Alexey Miller explained to reporters, the parties agreed to abolish penalties for gas shortages. Although they were provided for in the contract, the Russian side still did not collect them. Only earlier it was a gesture of goodwill, but now it will be formalized. When asked whether Kyiv provided a discount on gas transit in exchange (and changes to the contract on the volumes and conditions of transit through the territory of Ukraine were also signed yesterday), Alexey Miller refused to answer. Formally, Russia agreed to the conditions proposed by the Ukrainian government. It was the annual discount of $4 billion that Ukrainian politicians called an option necessary for the country’s survival. However, Mr. Yanukovych admitted, there were “compromise proposals that still need to be negotiated.”
According to agreements signed in January 2009 by the previous Ukrainian Prime Minister Yulia Tymoshenko, the price of gas for Ukraine is determined by a formula based on quotations of fuel oil and diesel fuel in Italy. This price was revised quarterly. The base price for Europe under this agreement was set at $450 per thousand cubic meters, and the forecast price for this year, according to Ukrainian calculations, was $334, and according to Gazprom's - $325. “The prices that Yulia Tymoshenko signed drove the economy under plinth,” Mr. Yanukovych was indignant yesterday.
It should be recalled that the bargaining went on literally until the last moment. The day before, Ukrainian Prime Minister Mykola Azarov urgently flew to Moscow, although his official visit was supposed to take place on Thursday. Until late at night, he coordinated possible options with his Russian counterpart Vladimir Putin in Novo-Ogarevo.
Dmitry Medvedev emphasized that the corresponding discount on gas will be taken into account as rent for the presence of the Russian military base in Sevastopol. But what specific amounts are we talking about, how the offset will be made, whether the rent will be reduced proportionally, all these questions remain unanswered.
“These questions are more from the field of accounting than questions of a substantive nature. It is in such actions that the true intentions of neighbors, friends and relatives are revealed,” Dmitry Medvedev is convinced. Another economic and at the same time political gesture on the part of Russia was the presidential order to consider the issue of the participation of the Russian Black Sea Fleet base in the socio-economic development of Sevastopol. Viktor Yanukovych, for his part, noted that the presence of Russian warships in the Black Sea basin ensures security for the entire region and specifically for Ukraine. “Not a member of any military-political bloc,” he especially emphasized, remembering how painfully Moscow perceived the attempts of the previous Ukrainian leadership to get closer to NATO.
Other countries, if they want to see similar friendly gestures from Russia, should do something good themselves. “A real partnership is one thing, a declaration of intentions is another. It’s one thing to come to an agreement, another thing to accept for permanent residence a person who has lost his job,” this is how Mr. Medvedev answered the question whether Belarus can now, following Ukraine, hope for a friendly reduction in gas prices (already without that, however , the lowest in the post-Soviet space).
The official visit of the Russian president to Kyiv will take place in May, and by this time, he promised, other, no less important agreements will be prepared. For his first working visit to Ukraine as president, Dmitry Medvedev chose not the capital, but the second largest city, Kharkov.
Why Kharkov was chosen for the first visit of the Russian head of state is not fully known. Perhaps because here, unlike many other Ukrainian cities, there are still a lot of signs in Russian on the streets. In addition, the Kharkov Aviation Plant, one of the assets of the Ukrainian aircraft manufacturing concern Antonov, is located here. Previously it was assumed that a controlling stake in the concern could be transferred to the Russian United Aircraft Corporation in exchange for concessions on gas prices. The visit to the plant was on the Russian president’s schedule until the last moment, but then it was cancelled. Either the concessions on the Black Sea Fleet were enough, or the transfer of a controlling stake will take place in May, within the framework of those agreements that have yet to be concluded.