Forums/Business: Is Russia doing enough to secure energy supplies to Europe?

quote Sam

07 March, 2008, 14:20

in reference to my last post,the cost of gas is per 1000 cubic metres and not 100 as I typed.
On this point I agree with James.If the west thinks Russia is being unfair with Ukraine and the other states getting the gas at such reduced prices then they should off set the balance.Lets see thats now going to be $120 for every 1000m3 that ukraine uses should come from the USA or the West:)
I dont see that happening.

quote James

07 March, 2008, 12:29

Gas dispute does not project any good image for Ukraine as they are seen as country that does not want to pay for what it consumes and does not respect signed agreements.

Western Hypocrisies on the other hand are doing their best to exploit this situation and put Russia in a bad light no matter what the justification. They say that Russia is using its energy resources to apply political pressure on its neighbours. On the other hand Western Hypocrisies led by the US blackmail more than half of the population of this planet through sanctions.

For 45 years Western Hypocrisies were bombarding Eastern Europe with free market slogans. And now 17 years after the end of cold war Western Hypocrisies object to Russia’s free market prices for gas. I will never stop being amazed.

If Western Hypocrisies truly believe that Ukraine should pay less than the market price for gas, they should offer Ukraine a subsidy.

quote Sam

07 March, 2008, 11:59

How do you have an "alleged" $600million dept?we are not talking about a fiver here.A Company cannt just fake a $600million dept just to get back at a customer:)

Ukraine has now agreed to pay $179.5 per 100 cubic metres.Well its still not not the $295 the rest of the customers that are not charity cases paying.
How can any independent country claim any rights by demanding massive discounts on the international going price and still argue when it is refused?
If they pay the $295 then cannt see gazprom or anyone having a hold on them.

quote Sevodnya_Net

07 March, 2008, 08:43

I'm desperately trying to stay neutral on this gas dispute, despite my serious misgivings about GAZPROM generally. I don't think Ukraine's alleged failure to pay is to do with their refusal to pay GAZPROM's asking price. In fact, Ukraine reluctantly agreed to the new GAZPROM rates a long time ago - what was at dispute was the payment method.
A previous dispute concerned I believe a question about Ukraine allegedly not paying for extra gas received from GAZPROM due to a problem with the Central Asian supply. Similarly, this current dispute is complicated by alleged non-payment of transit fees by GAZPROM (and indeed the whole gas transit issue anyway) and the fuss over RosUkrEnergia or whatever they're called (it's something like that - I can't be bothered to look it up!).
I should also say that the fact that both countries look silly is maybe unfair but is certainly true.

quote sam

06 March, 2008, 19:24

Sevodnya_Net wrote
Regardless of the rights and wrongs both countries are making themselves look very silly in the eyes of the outside world.
And how do you suggest getting someone who constantly refuses to pay their gas bills to pay if not by cutting supplies?
If anyone looks silly then thats Ukraine alone.Paying less the half the going rate like a charity case and still defaulting on that.The Economy or the well being of Ukraine is not the responsiblity of the RF so why should she fund Ukraine's economy but cutting her fuel spending by half?

quote Sevodnya_Net

06 March, 2008, 15:35

"Isn't <Yulya Tymnoshenko> now using politics, using the people of Ukraine, risking nationalist conflict, to further her own financial greed? She personally has more to gain than anybody out of paying a low price for Russia's gas and then selling it on for a profit. "

I don't want to sound like an apologist for the Ukrainian PM, but from what I have read of the situation she is actually trying to reduce profiteering in the Ukraine/Russia gas relationship by insisting that Ukraine buys its gas direct from GAZPROM, without a pointless middleman creaming off money for itself.
Ukraine in turn is not in a position to act as an intermediary supplier of Russian gas - it uses all the gas it buys from GAZPROM for its domestic purposes.
Where it does potentially have leverage is in theoretically being able to interrupt supplies transiting the country to western Europe. In practice, it can't really do this as it risks being attacked by the west (verbally that is!) and losing its gas supplies from the east, all of which come via GAZPROM if mainly not from Russia.
The latest alleged "resolution" of this dispute seems highly dubious to me. It isn't clear what has actually been agreed, or what has changed, and nothing seems to have been signed. I have to say that I think GAZPROM seem continuously overeager to cut, or threaten to cut, supplies to their customers.
Regardless of the rights and wrongs both countries are making themselves look very silly in the eyes of the outside world.

quote Norman

06 March, 2008, 13:44

As I've said before, as much as I prefer the Ukraine over Belarus, Russia needs a stable oil pipeline to Europe. And the Ukraine needs to pay for it's gas, because Gazprom is a business not a social services agency. Last, stealing gas is a criminal act.

quote Keith

06 March, 2008, 09:17

Before she entered politics, Julia Timoshenko was already the richest woman in Ukraine due to her getting control of Ukraine's gas industry in the carve up post Soviet Union.
Isn't she now using politics, using the people of Ukraine, risking nationalist conflict, to further her own financial greed? She personally has more to gain than anybody out of paying a low price for Russia's gas and then selling it on for a profit.

quote fred

05 March, 2008, 15:41

david .

i kinda agree about ukrain .
just have a look at the european bank for reconstruction and dev. website , look at "procurements" and see "ukrain"

we (europeans) are building them a new country . for free !

in return , they honour us by saying "we'll steal your gaz , since the money raised for paying the bills has been taken by our politicians .!"

one day i suppose Ukrain will have to understand a simple thing :

in geographic europ , things have to be added , not taken instead .!
so europ + ukrain + russia = something that can be mutually good .

ukrain one day with europ (or russia) , the day after against it = as soon as europeans will be fed-up with ukrainians = nothing anymore .!

i really wonder what is the life-style of yulia , nowaday .?
i have seen her in paris (some times ago ), the first time she was in Govt , when she came begging for things and investments .

she came in her private jet , was changing clothes every hour or 2 and nothing like cheap stuff. (only high-end fashion)

how funny (and stupid) for someone who came for such begging .!!! ;-))

quote David

05 March, 2008, 13:16

Gazprom should cut all supplies going to Europe via the Ukraine now that the Ukraine is threatening to syphen supplies destined for Europe.
Russia will be blamed in any event why not get blamed for something substantial. This Ukraine business goes beyond belief - they wanted their independence from Russia but they still want everything for nothing - sounds very much like our African 'friends'.
If Ukraine uses gas it should pay for it - we have to as individuals.

quote sam

04 March, 2008, 20:42

Sanjay your ideas are really fantastic.
The solution for a country who cannt pay its bills is that it should Unite with the supplier so they dont pay any bills LOL.
Its like if you cannt pay your gas bill,the Gas company sends you shares for your trouble:)
Its simple, dont buy what you cannt afford.The fact that they are paying $110 and not $290 like others is charity.Ukraine has to prove it is an independent country and not a charity case.
Not only she should pay all her bills but also the going price.Then when or if she Joins NATO she will not be biting the hand that feeds her.
Whats all this talk about disrupting supplies to the west.Is that not blackmail?
I cannt pay my bills but if you cut me.I will make sure nobody gets theirs too.Really sad for a country's pride.Interesting how the west and EU will blame Russia again this time.

quote Sevodnya_Net

04 March, 2008, 15:21

The latest gas dispute between Russia and Ukraine is very alarming.
Ostensibly the argument is over unpaid gas by Ukraine - Ukraine claims to have paid, GAZPROM claims it hasn't. I don't know who is correct.
It is also true that Ukraine has not handled this dispute particularly well: you don't need to be an expert in Ukrainian affairs to know that the President and the PM don't care much for each other. The Ukrainian PM clearly believes that third party transit companies cream off huge profits for themselves and was less than impressed with the President's cosy deal with Putin which merely swapped one dodgy operator for another. Tymoshenko wasn't having that and I don't blame her.

Ukraine also claims that GAZPROM has paid no transit fees for a year. Ukraine points out that it is not going to use blackmail to get its way as GAZPROM allegedly has. The fact is, though, that if Ukraine were to retaliate in kind it would seriously affect supplies to western Europe and it is not clear that Russia would continue to get the blame for this as it has in the past.
Russia has Ukraine over a barrel, so to speak, when it comes to energy supplies. Although Ukraine only now gets 25% of its gas from Russia it relies on all of its supplies from GAZPROM pipelines and the gas which GAZPROM is now cutting is actually not Russian gas at all but gas from Central Asia.
In short, GAZPROM controls both the infrastructure and the energy and that control is slowly spreading.
There are people, who I've always refused to believe, who claim that Russia is hell bent on compensating for its loss of military power and its former satellite states, by - not exactly waging economic war - but re-exerting its influence via a slow stranglehold of those near territories, in this case using the tentacles of its energy pipelines.
I still prefer to believe that its all part of a massively corrupt, state-sponsored monopoly which simply exists to fatten the new oligarchs under the guise of a state-run energy company, but it would, nonetheless, be worth keeping an eye on those pipelines!

quote Sanjay

04 March, 2008, 15:06

Ukraine Russia Belarus and Kazakhstan have common culture common past and a shared identity and destiny.

12 centuries of common history from kievan rus down to Kipchak Golden Horde and Russian Empire bind them together.

Only when they put their lot together and unite into a common security and economic union without militaristic tendencies would there be harmony in Eurasia.

Anglo-american financiers are actively seeking to bypass Russia and seek energy from caspian lake. These attempts must be put to death once and for all.

Energy security or Regional Security, no one is safe from anglo-americans now.

Russia-Ukraine-Belarus and Kazakhstan must unite .

quote sam

27 February, 2008, 07:35

There are other countries like armenia and Belorus that are having problems with payments but not planning on joining NATO,I however see you point.
I ask you,on what grounds should Russia be billing maximum of $110 to these countries yet others pay the going price of $290.Since when had Russia taken up the role of Father Xmas?
Yet it was a big "political" bulling when Russia demanded more money then the $46 they were paying before.
In effect they are behaving like spoiled little children."Give me my pocket money but I hate you".

quote Concerned Citizen

26 February, 2008, 22:51

It is interesting to notice that the only countries that have a problem with paying their energy bills are the same countries striving to join NATO. Namely, Ukraine and Georgia. If they see feasible to spend billions of dollars or euros on getting ready to be the West's canon fodder, they should also find a billion or two to pay for the gas and oil. Don't their Western masters ship billions of dollars fresh off the press? How disappointing for them that Russians refuse to finance their own foe.

quote Sevodnya_Net

21 February, 2008, 18:44

Sam,
Re Belarus and Russia I agree with you. I wasn't suggesting that Russia simply wanted to annex the country.
But I do think that it wanted things on its terms, and was frustrated by Lukashenko's unexpected display of independence.
And the point about the disappearing buffer I made myself!

quote sam

21 February, 2008, 17:45

I would like to point out that it was Belarus that requested it goes into federation with Russia and not the other way round.
I honestly do not see it happening as Russia does not need Belarus economically,politically or military in any way.
As for Buffer,against NATO.Well if they enter a federation with Russia,there will be no buffer.

quote Sevodnya_Net

21 February, 2008, 15:21

Sam,
OK I admit that good old wikipedia (which is apparently where your quote comes from) is not the evil anti-Russian spawn of the devil that I am, and therefore does not describe the dispute in quite the same terms I do. I freely admit that Belarus was doing some dodgy things with Russia's gas and that GAZPROM's actions were not illegal. But essentially GAZPROM got what it wanted: its paws on the remaining 50% of BELTRANSGAZ for a song. Business certainly, but business with muscle and with uncertain consequences for Belarus and beyond.
The Russia/Belarus dispute almost certainly was a political one: Russia and Belarus, as I'm sure you know, have long talked about a merger, but Mr Lukashenko, in true maverick tradition, was playing hard to get.
Currently Belarus serves as a convenient buffer between Russia and the evil advance of NATO, but I wonder if Mr Putin has considered that if Russia and Belarus ever do unite then the evil empire will indeed be right up at Russia's borders :-)

quote sam

21 February, 2008, 06:56

Now Sevodnya_Net that is news to me.Mind sharing the link.
Here are the summary of the dispute between Russia and Belorus as lifted from Wiki which you had used before.

It escalated on January 8, 2007, when the Russian state-owned pipeline company Transneft stopped pumping oil into the Druzhba pipeline which runs through Belarus because Belarus was siphoning the oil off the pipe without mutual agreement.On January 10, Transneft resumed oil exports through the pipeline after Belarus ended the tariff that sparked the shutdown, despite differing messages from the parties on the state of negotiations.
For the long period, the gas price for the most of former USSR republics was significantly lower than for the Western European countries. In 2006 Belarus paid only $46 per 1000 m³, a fraction compared to $290 per 1000 m³ paid by Germany.[6] The annual Russian subsidies to the Belarusian economy were around $4 billion, as Russian president Vladimir Putin said on January 9, 2007. In 2006 Russia announced a higher price for 2007. After Alexander Lukashenko, President of Belarus, rejected this price change, and without a new treaty, Gazprom threatened to cut gas supplies to Belarus from 10:00 MSK on January 1, 2007. Both sides finally agreed on the following terms:

Russian gas to be sold to Belarus for $100 per 1000 m³ (compared to Gazprom's original request of $200 per 1000 m³)
Belarus to sell Gazprom 50% of its national gas supplier Beltransgaz for the maximal price of $2.5 billion
Gas prices for Belarus to gradually rise to the European market price by 2011
Belarus's transit fees for Russian gas to increase by around 70%
Another part of the energy dispute is the dispute for oil. In 1995, Russia and Belarus agreed that Russia would not impose any customs on oil exported to Belarus. In exchange, the revenues from this oil processed in Belarus would be shared by 15% for Belarus and 85% for Russia. In 2001, Belarus unilaterally canceled this agreement while Russia continued its duty-free exports. Lukashenko's state kept all the revenues, and many Russian oil companies moved their processing capacities to Belarus. On this arrangement, Russia also lost billions of dollars annually. On December 18, 2006, Russia put an end to this practice, announcing a standard $180 per ton toll on Russian export oil to Belarus.In response, Belarus imposed a tariff of US$45 per ton of oil flowing through the Druzhba pipeline, prompting Russia to claim that the move was illegal and to threaten retaliation, since it contradicts bilateral trade agreements and worldwide practice. Only imported or exported goods are being tariffed while transit goods are not objects of tariffing. Russia rejected paying the newly imposed Belarusian tariffs.

In compensation, Belarus began siphoning off oil from the pipeline. According to Semyon Vainshtok, the head of Russia's pipeline monopoly Transneft, Belarus had siphoned off 79,900 metric tons of oil since January 6. Vainshtok said this was illegal and the move was made "without warning anyone."In response, Russia stopped oil transport on January 8.

A Belarusian team led by Vice-Premier Andrei Kobyakov flew to Moscow on 9 January to pursue a solution but initially reported that they had not been able to start negotiations.

On January 10, the Belarusian government lifted the tariff, and Russia agreed to start negotiations.The oil flow was resumed at 05:30 GMT on January 11. In the wake of the dispute, Gazprom acquired 50% stake in the Belarusian gas pipeline operator Beltransgaz for 2.5 Billion USD

I think that clearly explains the dispute,do not see any blackmail there.
As for armenia,The New york times april 7, 2006.
Armenia will pay $110 for each 1,000 cubic meters of gas, about half the European average but twice what the country pays now, the Russian monopoly Gazprom said in a statement on Thursday,Gazprom in turn will buy a 24-mile section of pipe connecting Armenia to Iran, which other than Russia is the only plausible source of energy supplies in the region. Also under the deal Gazprom, through a joint venture, was granted a concession to build a larger second pipeline along this route.
I think thats a fair business deal.

quote Sevodnya_Net

20 February, 2008, 16:36

Several months ago Belarus was effectively blackmailed into handing its oil pipelines over to GAZPROM or face a four-fold increase in gas prices. Belarus being the black sheep of the European family, no one in the west - or anywhere else - paid much attention at the time, but it was no less scandalous for that.

Armenia has also faced the same threats, as threats are effectively what they are for comparatively poor countries.

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