Author Topic: The Annual Gas Crisis: Will January 2009 Be the Worst Ever?  (Read 41514 times)

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Offline P-N

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Kaharlyk (Kyiv Region), April 27 (Interfax-Ukraine) - Prime Minister Yulia Tymoshenko has stated that by the end of 2009 all regional gas supply companies [oblgases] will become state property.


"We are now working on that [property status issue], and I think by the end of this year we'll bring it to order and all the [regional gas supply] companies will be state owned," Tymoshenko told the press on Monday during her visit to Kaharlyk.

The prime minister said that under the previous cabinet of ministers RosUkrEnergo "was able to seize over 70% of the regional gas supply companies that supply natural gas to the public."

Tymoshenko said the oblgases would be fully nationalized, adding, "all the pipelines are state owned, as well as the gas supply systems."

As reported, during his press conference on April 24, SBU Chief Valentyn Nalyvaichenko said: "Yesterday, SBU sent a letter to the prime minister regarding the attempts of foreign companies to privatize oblgases, which is against Ukraine's economic interests."

Nalyvaichenko said that the money for gas is being paid through companies that have seized the oblgases. Thus, money is paid, but the state debt remains.


 :D :D :D :D :D :D - Will poor old Mr Firtash have anything left?

It also sounds like Tymo will be trying to reduce the agreed amount of gas Ukraine will by from Russia this year when she sees Vova in Moscow next.
"When surrounded by the dark void of the willfully blind, it does not excuse those that are a spark of light their duty to shine" - Me

Offline David Rochlin

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Tymoshenko has been planning to take back the Oblast Gas utilities for some time.  This would be at least her third threat to do so.  Naftogaz has quite a lot of receivables due from these companies.  They also are engaging in attempts to sell Ukrainian gas, and commodities easily made from the gas, like electricity, across the border, pissing off the Kremlin-based midget, and monitizing the subsidy that Ukraine gets relative to Western Europe. 
In a sense, Firtash and partners, including the Yushchenko clan and other Ukrainian pols, have already taken a lot of cash out of these Oblast utilities.  Customers, including cities, industries, cooperative apartment blocks, all pay the Oblast utility, and then the Oblast Utilities don't always pay Naftogaz for the gas sold.  Most likely those funds were paid out to the owners, Firtash & Co.  It could well be that Firtash has already got his whole investment back and more.  Consider that when Tymo takes back those Utilities, part of what she gets are businesses with huge unpaid debts to Naftogaz and all the cash squeezed out of them, perhaps unpaid bills, unpaid payrolls.  You know how that goes.   
   Frankly, I think Firtash and that guy he knows, but never did business with, Mogilevich, have billions stashed all over the world.  Nobody will ever figure out where they have it all.
But, even if Ukraine isn't a cash cow, and even if Firtash was foiled in Poland, and even if Russia is less profitable, Firtash still has control of his huge Hungarian business interests.  Mogilevich, as far as I know, is still controlling intermediary companies in the Urals (from his jail cell.)  It is difficult to believe that Russia could still be paying the Turkmen $350 per 1000m3 as per the contract Gazprom agreed to, and letting much of that continue to fall into Mogilevich's pockets.
    Russia was pretty much agreed to allow Ukraine reduced purchases, already, at least until the investment deal with EU.  I guess resolving that disagreement will determine how charitable the Kremlin-based midget will be.

Tymoshenko is now announcing that Ukraine will accumulate 20 Billion m3 of gas reserves equal to the largest reserves on hand in the last year.  The linked Reuters story says these will be record reserves for Ukraine, but that is incorrect.  They are not a record, because Ukraine had this amount immediately after stealing...(excuse me,) buying RosUkrEnergo's reserves.
« Last Edit: 07:38 28-Apr-2009 by David Rochlin »

Offline David Rochlin

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Ukraine has only purchased one third of the gas Tymoshenko agreed to buy in the Deal she cut with the Kremlin-based midget at the beginning of the year, because of the crisis, reduced usage by idled and reduced production at various metals plants and other industry, and because Ukraine had three months of gas supplies in underground storage.  Tymoshenko had agreed to buy gas, just as if nothing much was available in storage, but this was substantially a face saving move, so that the Kremlin-based midget could look like he was selling gas to Ukraine at over $300 per tcm.  The truth is that Ukraine was never expected to pay the ridiculous price set for the first part of the year.  Technically, Russia will have to approve Ukraine's reduced usage, and they have not formally done so.  The word seems to be, though, that if Ukraine does not piss the Kremlin-based midget off, over much, it is a done deal.

http://uk.reuters.com/article/oilRpt/idUKLS15832620090428

Offline David Rochlin

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Naftogaz cut gas delivered to Hungary in half.  This is assumed to be a move by Tymoshenko/Naftogaz against RosUkrEnergo/Firtash/Yushchenko & Co.  It is also a move by the Kremlin-based midget to weaken competing Siloviki who had undermined KBM's brown tonguer 's power in Russia.
One country at a time, RosUkrEnergo has lost its business as a gas trading intermediary.  Hungary has been one of the strongest remaining partners of RosUkrEnergo with Hungarian subsidiary, Emfesz, involved in a wide variety of energy projects.
Hungary will now be forced to deal with Gazprom, directly,  and face chronic shortages of gas until they do:

http://www.budapesttimes.hu/content/view/11823/219/

     

Offline David Rochlin

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Emfesz, the RosUkrEnergo subsidiary in Hungary, and an important remaining core of the Firtash business empire, says that it has been sold to RosGas AG

http://www.atimes.com/atimes/Central_Asia/KE08Ag01.html

Emfesz considers RosGas AG to be affiliated with Gazprom, but Gazprom denies the connection. 

Recently, Gazprom cut off Gas supplies to Emfesz, on paper, at least, but apparently this change in ownership satisifies the Russians and reopens the tap.  Firtash might have some interest in RosGas AG, but it is possible that he might have lost some control to Gazprom.

Offline P-N

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"When surrounded by the dark void of the willfully blind, it does not excuse those that are a spark of light their duty to shine" - Me

Offline David Rochlin

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http://www.ft.com/cms/s/0/eb9cbfd4-3b68-11de-ba91-00144feabdc0.html


Firtash's business legacy has been an entangled snarl of corporate interests, deliberately designed to hide assets, obfuscate interests and puzzle law enforcement.  It is a technique honed by his acquaintance who is "Not a business partner,"  Simeon Mogilevich, the Russian criminal mastermind who has controlled the Urals side of the gas intermediary, business.  He is perpetually awaiting his trial(s) in a Moscow jail.
  A consequence of this is that many of Firtash's shell companies have as officers, people who don't have anything to do with his business and were just paid to be a place marker.  Gazprom probably just exploited some of them.  So Firtash is "Hoisted by his own petard."
I guess it isn't particularly surprising for Gazprom to want to pick up this asset for kopeks.  They have probably paid considerably less for better, when they pay at all. 
   Firtash's Emfesz is deeply involved in various aspects of Hungary's energy business.  This situation might have implications, should the transaction not be reversed, that go beyond gas and gas customers.  Emfesz was also involved with electricity distribution, and I believe was actually planning to build one or more reactors, expanding a nuclear power plant.

Offline David Rochlin

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Mogilevich reportedly told people, prior to his arrest, that Gazprom wanted Emfesz and he had something to do with their plans for that company:

http://www.jamestown.org/single/?no_cache=1&tx_ttnews%5Btt_news%5D=34975&tx_ttnews%5BbackPid%5D=7&cHash=94c6684964

The linked article also explains how Emfesz is really to be controlled by Overgas, a company controlled by Gazprom's executive Alexander KBM's brown tonguer , which is also an intermediary, broker in Bulgaria.  So instead of direct Country to country gas deals, in Hungary and in Bulgaria, it appears it will be business done with an intermediary more directly controlled by Gazprom executives.  Thus, some Siloviki and mafia get cut out of the game.  the Kremlin-based midget consolidates his hold on Russia's shrinking energy income at the expense of the competitors of his own Siloviki.

Offline David Rochlin

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RosUkrEnergo's days in the gas brokering business appear to be numbered.  But, the company remains involved in a large number of businesses which have used subsidized gas purchases to create bulk commodities or convert gas into other forms of energy, for sale inside or outside of Ukraine.  These businesses are now being challenged.
Firtash has applied to Germany and Austria, asking for help to defend chemical business interests, such as fertilizer manufacturing. 

http://www4.mignews.com.ua/en/articles/353007.html

Offline David Rochlin

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When Tymoshenko and the Kremlin-based midget met a week ago, they discussed a deal that might mean Ukraine will never see the higher gas transit payments that would otherwise be expected in 2010.  Instead, Ukraine would get some of the gas required to survive next winter.
Ukraine would then get no transit fees for five years.  Perhaps Tymo will throw in Ukraine's firstborn children as an election year special:
http://www4.mignews.com.ua/en/articles/353803.html


Offline David Rochlin

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The furtive, sneaky transfer of ownership of Firtash controlled, RosUkr Energo's Hungarian subsidiary to RosGas, the Alexander KBM's brown tonguer  (deputy director of Gazprom) controlled, Bulgarian company, has been complicated, slightly, by a court order in Zug, that Firtash has obtained, ordering a halt to transfer of ownership of Emfesz to RosGas.  RosGas is a Swiss registered company.  However, RosGas refuses to acknowledge the court's jurisdiction, despite this:

http://www.portfolio.hu/en/cikkek.tdp?cCheck=1&k=1&i=17726
« Last Edit: 02:31 06-Jun-2009 by David Rochlin »

Offline David Rochlin

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    A 100% subsidiary of Naftogaz,  UkrTransnafta has been relatively uninvolved in the gas crisis, because they are involved in transporting oil through Ukraine's Odessa/Brody pipeline.

Who are they:
http://www.ngbi.com.ua/td/eng/about.html

They are being raided in a raid similar to the March invasion of Naftogaz's main office and the attempted UkrTransGaz invasion at the same time.

http://www4.mignews.com.ua/en/articles/357959.html

The raid was apparently directed by recently fired Deputy Chairman, Lazorko. 

Basically, years ago, the pipeline was built with Western Investment, to move Caspian oil from Odessa to the Baltic.  Business agreements to utilize the capacity of the line were not successfully concluded and Russia pressured Ukraine to reverse the pipeline in 2004 and send oil from Russia to Odessa.   Yushchenko decided to reverse the pipeline again, and send oil the other way.  This use would apparently reinvigorate declining Ukrainian oil refineries. 

http://en.wikipedia.org/wiki/Odessa-Brody_pipeline

Note that Alexander Lazorko is on the board of one of those refineries.  And he was the Deputy Chief of UkrTransNafta, and he is in charge of the pipeline reversal.

http://blog.kievukraine.info/2008/09/ukraine-reverses-odessa-brody-pipeline.html

Yushchenko is the proponent of re-reversing the pipeline.  Tymoshenko is the opponent.  And so, we have another point of confrontation, between the two.  Tymoshenko wants the pipeline to stay the way it is, because that is the pro-Russia side of the equation.

There is usually a more personal economic motive in these confrontations, but it has not yet been exposed.



Carlusha

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Interesting ........

www.business24-7.ae

Offline David Rochlin

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Interesting ........

www.business24-7.ae

Exploration and development of deeper gas deposits, such as the recent, major discovery by Shell, offshore from Norway, will reverse the decline.  Deep gas drilling has already reversed the decline of the gas industry in America, which was given up for dead a few years ago.  There is enough deep gas to supply all of Europe for decades. 
In order of size of predicted reserves of deep gas:
Russia
Poland
Germany
Other European countries like Ukraine, probably have enough to achieve gas, self sufficiency for a decade, but will not be major exporters.
Unfortunately, the technology is new, and despite the urgency, and need, only  gradually deployed in Europe.