Identifier
Created
Classification
Origin
08MOSCOW394
2008-02-14 03:34:00
CONFIDENTIAL
Embassy Moscow
Cable title:
RUSSIA AND UKRAINE RESOLVE GAS DISPUTE, AGREE TO
how-toVZCZCXRO7648 PP RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR DE RUEHMO #0394 0450334 ZNY CCCCC ZZH P 140334Z FEB 08 FM AMEMBASSY MOSCOW TO RUEHC/SECSTATE WASHDC PRIORITY 6573 INFO RUCNCIS/CIS COLLECTIVE PRIORITY RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY RHEHNSC/NSC WASHDC PRIORITY RHMFISS/DEPT OF ENERGY WASHINGTON DC PRIORITY RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
C O N F I D E N T I A L MOSCOW 000394
SIPDIS
SIPDIS
DEPT FOR EUR/RUS, FOR EEB/ESC/IEC GALLOGLY AND WRIGHT
EUR/CARC, SCA (GALLAGHER, SUMAR)
DOE FOR HARBERT, HEGBORG, EKIMOFF
DOC FOR 4231/IEP/EUR/JBROUGHER
E.O. 12958: DECL: 02/04/2018
TAGS: EPET ENRG ECON PREL RS
SUBJECT: RUSSIA AND UKRAINE RESOLVE GAS DISPUTE, AGREE TO
ELIMINATE CURRENT INTERMEDIARIES
Classified By: DCM Daniel A. Russell for Reasons 1.4 (b/d)
C O N F I D E N T I A L MOSCOW 000394
SIPDIS
SIPDIS
DEPT FOR EUR/RUS, FOR EEB/ESC/IEC GALLOGLY AND WRIGHT
EUR/CARC, SCA (GALLAGHER, SUMAR)
DOE FOR HARBERT, HEGBORG, EKIMOFF
DOC FOR 4231/IEP/EUR/JBROUGHER
E.O. 12958: DECL: 02/04/2018
TAGS: EPET ENRG ECON PREL RS
SUBJECT: RUSSIA AND UKRAINE RESOLVE GAS DISPUTE, AGREE TO
ELIMINATE CURRENT INTERMEDIARIES
Classified By: DCM Daniel A. Russell for Reasons 1.4 (b/d)
1. (SBU) As most watchers expected, Russia and Ukraine came
to a last minute agreement to settle the latest gas dispute
(reftel) and avert a cutoff of gas flows. Announced by
President Putin following a meeting with his Ukrainian
counterpart just as the 6:00pm February 12th deadline
arrived, the deal includes replacing current intermediaries
RosUkrEnergo and UkrGazEnergo with a new entity owned jointly
by Gazprom and Ukraine's state-owned gas company, NaftoHaz
Ukrainy. The agreement seems to give something to both
sides. Ukraine avoids a gas cutoff and eliminates the
existing "murky" middlemen. Russia avoids another PR
disaster while getting Ukraine to acknowledge its debt.
2. (C) It is not exactly clear, however, how the debt issue
was resolved. There seems to be agreement that Ukraine would
begin repaying its debt, but the make up and amount of the
debt as well as the exact timing of the repayment were left
vague. Ukrainian Prime Minister Tymoshenko, for instance,
has acknowledged only $1.1 billion of debt, while Gazprom
claimed a debt of $1.5 billion. Perhaps more importantly,
despite pronouncements by leaders on both sides that the gas
trade be "as transparent as possible," neither side would
provide details on the nature and role of the new
intermediary.
3. (C) Gazprom's International Affairs Director Ivan Zolotov
told us February 13th that the Ukraine gas trade is a "purely
commercial matter for Gazprom." It appears that Gazprom will
now have more direct access to revenues from the large
industrial Ukrainian consumers that previously paid
UkrGazEnergo. Zolotov also pointed out that "Gazprom needs
Ukraine and the EU as much as they need Gazprom -- we are not
going to jeopardize these important relationships, we're in
this to make money." Although this type of dispute may
repeat itself, the mutual dependency of Gazprom, Ukraine, and
the EU should ultimately help keep the gas flowing, even if
new non-transparent entities replace the old ones.
BURNS
SIPDIS
SIPDIS
DEPT FOR EUR/RUS, FOR EEB/ESC/IEC GALLOGLY AND WRIGHT
EUR/CARC, SCA (GALLAGHER, SUMAR)
DOE FOR HARBERT, HEGBORG, EKIMOFF
DOC FOR 4231/IEP/EUR/JBROUGHER
E.O. 12958: DECL: 02/04/2018
TAGS: EPET ENRG ECON PREL RS
SUBJECT: RUSSIA AND UKRAINE RESOLVE GAS DISPUTE, AGREE TO
ELIMINATE CURRENT INTERMEDIARIES
Classified By: DCM Daniel A. Russell for Reasons 1.4 (b/d)
1. (SBU) As most watchers expected, Russia and Ukraine came
to a last minute agreement to settle the latest gas dispute
(reftel) and avert a cutoff of gas flows. Announced by
President Putin following a meeting with his Ukrainian
counterpart just as the 6:00pm February 12th deadline
arrived, the deal includes replacing current intermediaries
RosUkrEnergo and UkrGazEnergo with a new entity owned jointly
by Gazprom and Ukraine's state-owned gas company, NaftoHaz
Ukrainy. The agreement seems to give something to both
sides. Ukraine avoids a gas cutoff and eliminates the
existing "murky" middlemen. Russia avoids another PR
disaster while getting Ukraine to acknowledge its debt.
2. (C) It is not exactly clear, however, how the debt issue
was resolved. There seems to be agreement that Ukraine would
begin repaying its debt, but the make up and amount of the
debt as well as the exact timing of the repayment were left
vague. Ukrainian Prime Minister Tymoshenko, for instance,
has acknowledged only $1.1 billion of debt, while Gazprom
claimed a debt of $1.5 billion. Perhaps more importantly,
despite pronouncements by leaders on both sides that the gas
trade be "as transparent as possible," neither side would
provide details on the nature and role of the new
intermediary.
3. (C) Gazprom's International Affairs Director Ivan Zolotov
told us February 13th that the Ukraine gas trade is a "purely
commercial matter for Gazprom." It appears that Gazprom will
now have more direct access to revenues from the large
industrial Ukrainian consumers that previously paid
UkrGazEnergo. Zolotov also pointed out that "Gazprom needs
Ukraine and the EU as much as they need Gazprom -- we are not
going to jeopardize these important relationships, we're in
this to make money." Although this type of dispute may
repeat itself, the mutual dependency of Gazprom, Ukraine, and
the EU should ultimately help keep the gas flowing, even if
new non-transparent entities replace the old ones.
BURNS