Monday, January 02, 2006

Ukraine MFA Statement on Gas Crisis

Ukraine, Russia, Europe, The US, Oh My! has posted an unofficial translation of yesterday's statement by the Ukrainian Foreign Ministry, charging Russia with violating its contractual obligations to Ukraine and EU member-states. As this is an important document, I'm reproducing it in full:
January 1, 2006

On the first day of 2006, the Russian Side, violating its contractual obligations started to decrease the volume of gas supply to Ukraine and EU member-states.

In such a way, a scenario was launched, with the aim to exert economic pressure, blackmail, and, ultimately, destabilize the Ukrainian economy and disrupt Russia's gas supplies to consumers in EU countries.

Aforementioned irresponsible and destabilizing actions are put into practice in spite of current international obligations of the Russian Side, undertaken in compliance with the Agreement of October 4, 2001, as well as in spite of compromise proposals, put forward on December 30, 2005 by the President of Ukraine in his letter to the President of the Russian Federation, and notwithstanding cautions concerning the peril of such steps for the atmosphere in relations between Ukraine and Russia, and their perception by the Ukrainian society.

The Russian Side rejected all concrete proposals on prices and tariffs, submitted by the Ukrainian delegation during the negotiations in Moscow on December 27-30, obstinately insisting on the so-called "market" price of $ 230 for 1000 cubic metres of gas. Meanwhile, the Ukrainian Side was ready to agree upon gradual transition to market methods of cooperation in gas sphere.

Furthermore, Moscow "did not hear" the proposal of the President of Ukraine in regard of declaring a moratorium on changing prices and tariffs before accomplishing talks that were suggested to be held with the participation of international experts during the first ten days of January 2006. Finally, the Russian Side rejected the official commentary, submitted to the Russian Federation on December 31, 2005, in a note of the MFA of Ukraine. The document clearly substantiated the validity of the position of the Ukrainian Side based on current contractual obligations of the Parties. The regrettable facts of demonstrative neglect of the contract in force and decreasing the volume of gas supply display the existence of certain forces in Moscow that spur the country on the way of unpredictability and blackmailing in regard of consumers in all countries.

The intimidations sounded by the statement of the MFA of the Russian Federation of January 1, 2006, are merely intended for poorly informed Russian citizens, lulled by bridled analysts and controlled mass-media. Politicians and societies of Ukraine, EU countries and the US are perfectly aware of the fact that, in compliance with the current contract of 2002 and with the Supplement #4 to this contract of August 9, 2004, Russian companies are obliged to supply gas to Ukraine on a fixed terms in order to ensure the transit of Russian gas via Ukrainian territory to the EU member-states and other countries.

Ukrainian Side is ready to prove consistently the validity and fairness of its position by all means, including through the international arbitration. We consider the possibility of an appeal to nuclear states - the guarantors of Ukraine's national security according to the Memorandum of 1994 - in order to apply the mechanism of consultations.

Irresponsible and destabilizing actions of certain forces in Moscow that apparently do not even inform their own authorities about the actual state of affairs, threaten with undermining the image of Russia as a reliable partner in energy sphere in the very year of its chairing in G-8, as well as with considerable losses for Russian taxpayers, who will have to pay off the doubtful financial consequences of such a policy. Hence, it is easy to predict, how the North-European gas pipeline will be used.

Thereupon, the MFA of Ukraine is authorized to state the following:

1. Ukrainian Side insists on the transition to market principles of cooperation in gas sphere and on introduction since January 1, 2006 of prices for gas supplies and tariffs for its transit in compliance with European pricing methods.

2. We suggest both delegations to renew the negotiation process involving international experts.

3. We propose to set a moratorium on non-market methods of settling existing disagreements.

4. Ukraine will proceed with its efforts to remain a reliable transporter of Russian gas to the EU member-states and other countries in accordance with the contracts in force, even though the fulfilment of our obligations will be carried out at the expense of the own gas resources that are not supplied by Russia for this purpose. At the moment, the energy security of the gas consuming states is seriously threatened and no country could be excluded in this context. All this requires coordinated efforts of natural gas producing, transporting and consuming states and that is what Ukraine urges for.

January 1, 2006
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