Friday, November 08, 2013


"Ukraine on Tuesday signed a deal worth up to $10bn with Chevron to exploit its shale gas reserves – one of the biggest such agreements in Europe to date – as it steps up efforts to break free from its reliance on Russian gas. In what is Ukraine’s second such deal this year, Chevron will gain the rights to explore and eventually produce hydrocarbons in two western Ukrainian regions. They hold an estimated 2.98tn cubic metres of gas reserves, making them among the largest in Europe. Ukraine’s president Viktor Yanukovich said the Chevron agreement, on top of a similar one with Royal Dutch Shell in January, “will allow us by 2020 to become self-sufficient in gas, and, under an optimistic scenario, to become an exporter”. The deal could increase tensions with Russia, which have flared as Ukraine prepares to sign a far-reaching trade and political association agreement with the European Union later this month. Russia has banned Ukrainian products from steel to chocolates and temporarily stepped up border customs controls ahead of the EU agreement.... Ukraine’s efforts to boost domestic gas production follow years of wrangling with Russia’s Gazprom – of which Ukraine is one of the biggest customers. The Russian gas monopoly has twice cut off supplies to Ukraine in midwinter, in 2006 and 2009, amid pricing disputes. Gazprom last week raised the prospect of a new winter shut-off this year when it warned that Ukraine’s cash-strapped state gas monopoly had fallen behind on $882m of payments for gas. Ukraine’s energy minister has said he expects the arrears issue to be settled shortly. Gazprom responded to Ukraine’s deal with Shell in January by sending a $7bn bill for gas which Ukraine was contracted to buy from Gazprom in 2012 but did not use, on which negotiations are continuing. ".
Mark Rachkevych & Neil Buckley, "Ukraine signs shale gas deal with Chevron." The Financial Times. 5 November 2013, in
"It was the Kremlin with its impudence and intimidation that has succeeded in consolidating the conflicting Ukrainian elite clans on a pro-European basis. The recent Moscow trade war with Kiev was a perfect illustration of how the Law of Unintended Consequences works! Ukrainians have to build a monument to Putin surrounded by his team, with Sergey Glazyev at the forefront, acknowledging their input into helping the Ukrainian elite to overcome their doubts as to their country’s trajectory. For Putin the growing readiness of Ukraine to turn to Europe despite the formidable costs of this decision is a real disaster. Putin’s Eurasian Union cannot be a serious entity without the second large Slavic state limping along. It needs Ukraine as an anchor. Eurasia simply cannot exist without Ukraine. And without the Eurasian Union the Kremlin cannot reenergize the system of personalized power which needs satellite states. The new Putin’s Doctrine that he offered the world recently at Valdai is based on the linkage between the Russian “state-civilization” and the Eurasian Union, which is supposed to be like a galaxy with Russia as the pole. The galaxy will be a pathetic one without Ukraine. It would not be an exaggeration to say that Ukraine running away from Moscow will mean a devastating blow to the resilience of the Russian “state-civilization” that Putin tries to build".
Lilia Shevtsova, "How Ukraine Ruins Putin’s Dream." Carnegie Moscow Center. 8 October 2013, in www.
"Our agreement with Japan, dated April 13, 1898, sanctioned the dominating position of that country in Korea. If we had faithfully adhered to the spirit of this agreement, there is no doubt but that more or less permanent peaceful relations would have been established between Japan and Russia. We would have quietly kept the Kwantung Peninsula while Japan would have completely dominated Korea, and this situation could have lasted indefinitely, without giving occasion to a clash.... On the day when the news of the rebellion reached the capital, Minister of War Kuropatkin came to see me at my office in the Ministry of Finances. He was beaming with joy. I called his attention to the fact that the insurrection was the result of our seizure of the Kwantung Peninsula. "On my part," he replied, "I am very glad. This will give us an excuse for seizing Manchuria." I was curious to know what my visitor intended to do with Manchuria, once it was occupied. "We will turn Manchuria," he informed me, "into a second Bokhara."
Count Witte. The Memoirs of Count Witte. (1920). pp. 106-107.
The maladroit and bullying nature of Russian diplomacy under Grazhdanin Putin, would appear to be about to have it just rewards with Ukraine's imminent signing of a partnership agreement with the European Union. As Lilia Shevtsova has correctly pointed out, sans Ukraine, Putin's idea of a resurrected Sovietskaya Vlast in economic form would have little or no substance. Not only would Kiev's failure to adhere to Putin's customs association call into question the significance of the former, but Kiev's tie-up with Brussels would inevitably bring into train a liberalization of the internal political regime in Ukraine as well. And an ongoing democratizing project in Kiev would inevitably call into question the nature of the regime in Russia itself. In short, notwithstanding the fact that in some sense, Moskva had some cards to play with, in its endeavors since 2004 to keep Ukraine out of the EU-NATO-Western orbit, the domineering style of Russian diplomacy, with all sticks and very little by way of carrots, appears to have backfired tremendously. With the initial diplomatic success that Putin enjoyed with the current Ukrainian President (viz the agreement on basing Russia's Black Seas Fleet), Viktor Yanukovych being wasted by his inability to modulate his demands upon Kiev. In that respect Putin is a worthy heir of those individuals who historians have assigned the chief role in the Russian debacle in the Russo-Japanese War of 1904-1905: the Bezobrazovschina.


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