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Poland Agrees to Joint Development of Ukraine's Odesa-Brody Pipeline

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Poland Agrees to Joint Development of Ukraine's Odesa-Brody Pipeline INSIDE:• Can Marchuk become Ukraine’s transitional strongman? — page 2. • Kyivans celebrate Epiphany on the banks of the Dnipro — page 3. • U.S. ambassador speaks on democracy in Ukraine — page 5. Published by the Ukrainian National Association Inc., a fraternal non-profit association Vol. LXXII No. 4 THE UKRAINIAN WEEKLY SUNDAY, JANUARY 25, 2004 $1/$2 in Ukraine Poland HEagrees to jointKRAINIAN development EEKLY T U PACE monitorsW caution Kyiv of Ukraine’s Odesa-Brody pipeline on constitutional reform process by Roman Woronowycz according to Interfax-Ukraine. He identified by Roman Woronowycz political crisis. Kyiv Press Bureau three phases in the project: preparation and Kyiv Press Bureau “It would be good to avoid [reaching analysis of financing and investment; nego- the stage] where the political system as KYIV – Poland agreed on January 16 tiations with participants; and start-up. KYIV – Council of Europe representa- such is discredited,” explained Ms. to joint development of the Odesa-Brody Even with a concrete plan finally on the tives responsible for monitoring Severinsen. “Ordinary people think what oil pipeline from the Ukrainian border to table in the long-awaited agreement Ukraine’s movement towards democracy is going on in the Parliament is not in the Plotsk, near the Baltic Sea, where the oil between Poland and Ukraine, controversy warned on January 20 of a looming con- interest of the people.” would be transported by sea to ports in which has been the hallmark of the effort to stitutional crisis in the country and did Ms. Severinsen, who explained that Western Europe. develop the Odesa-Brody pipeline – again not rule out the leveling of sanctions by her remarks were preliminary assess- The agreement, signed two days after emerged a day before the signing ceremony. the quasi-governmental European human ments of what would become a formal Ukraine’s Cabinet of Ministers officially On January 15, Energy Solutions, a con- rights organization should specific politi- report to the Parliamentary Assembly of approved the project, is a major step in sulting firm contracted by the Ukrainian cal forces use constitutionally unautho- the Council of Europe, said she ques- assuring the pipeline’s economic feasibility. government to assess the economic viabili- rized means to push through political tioned whether it was acceptable to initi- It heralded the first concrete step towards ty of utilizing the still-barren oil pipeline in reforms. ate constitutional changes just 10 months development of a single oil transport corri- reverse, stated that the preliminary conclu- At the conclusion of an unscheduled before major elections. The PACE rap- dor from the Black Sea to the Baltic Sea, sions drawn from its analysis showed that it visit to Ukraine to review the political porteur also noted that constitutional which would make it one of the main oil was economically expedient to pump oil conflict that has developed over the changes should not be undertaken “like pipelines from the oil-rich Caspian Sea from Brody to Odesa for a three-year peri- upcoming presidential elections and the you change your shirt,” and said she was region to energy-starved Europe od, during which time Ukraine could effort to have the Verkhovna Rada take disturbed by the lack of deliberateness in It occurred nearly simultaneously with a develop its Caspian oil route. It stated that the right of direct popular election of the the process. She also said that she had renewed impetus to keep the focus of the Ukraine could make up to $35 million dur- president upon itself, the two representa- serious reservations regarding the inde- Ukrainian government on an alternative, ing the life of the contract. tives expressed serious concern regarding pendence of the Constitutional Court reverse usage of the Ukrainian oil transport However, Ukraine’s Ministry of Fuel the manner in which the constitutional after it unexpectedly – and to many system, from Brody to Odesa. Extensive and Energy immediately refuted delivery of change process undertaken by the pro- unconvincingly – handed down the ruling mass media reports on January 15 stated the report and stated that it had yet to presidential majority in the Parliament allowing President Kuchma an exception that reverse use of Odesa-Brody could receive any results from the consulting had moved forward thus far. to a third term in office. bring Ukraine economic benefit, according firm. Minister of Fuel and Energy Serhii Hanne Severinsen, rapporteur for the Ms. Severinsen explained that her to a not-yet-released feasibility study. The Yermilov said he was still awaiting the offi- Parliamentary Assembly of the Council hope was that sanctions by European study, to be released by Energy Solutions cial report and that the firm had a January of Europe (PACE), said during a press countries could be avoided if a proper LLC, a little-known energy consulting 19 deadline to present it. He also noted that conference that after the events of the last dialogue developed between the political firm, which coincidentally or not also is a decision by President Leonid Kuchma month, including a procedurally ques- groups within Ukraine during which a the name of a widely known and respected was not expected before February 1. On tionable hand vote in the Parliament to proper procedure for constitutional Washington-based lobbying firm, was held January 17, the issue surrounding the change the Constitution of Ukraine as change could be agreed upon. back after Energy Solutions stated that it results of the analysis became more unclear well as several Constitutional Court rul- Ms. Severinsen noted that, while not needed more time to complete its analysis. when Energy Solutions asked for more ings – one allowing President Leonid yet publicly confirmed, she believed the Several energy and oil transport time to present the full feasibility study. Kuchma to run for a third term even looming constitutional crisis in Ukraine experts in Kyiv who spoke with The Much of the intrigue that has developed while the Constitution limits a state Weekly, nonetheless, rejected any possi- around the Odesa-Brody oil pipeline leader to two terms – Ukraine was in (Continued on page 19) bility of economic benefit from reverse involves Russia’s Tyumenskaya Neftanaya use of the oil pipeline. Kompania (TNK) and its recently acquired The Polish-Ukraine agreement, which partner, British Petroleum. The new con- Central and Western European leaders glomerate has made a determined effort to Rumors of Kuchma’s death and the United States have strongly sup- convince Ukrainian officials to allow them ported, stipulates the creation of a joint to pump low-grade Russian Urals crude stock company between the two coun- through Brody to Odesa for a three-year takeby Roman onWoronowycz a life ofThe rumortheir also spread own quickly beyond tries, the preparation of a business plan period. In Odesa the Russia crude would and the development of investors. Kyiv Press Bureau Ukraine to the Ukrainian diaspora, and be transferred on to tankers and moved was the subject of countless telephone UkrTransNafta, the wholly govern- through the Black Sea through the KYIV – By the time President Leonid ment-owned firm that built and controls calls and e-mail exchanges beginning on Bosporus Sea into the Mediterranean and Kuchma returned on January 17 to Kyiv January 16. It was bolstered by a report the Odesa-Brody pipeline, has said it has onto southern Europe. from Baden-Baden, where he was under- developed informal agreements with carried by a Russian-based news service, The main argument TNK-BP has used going medical treatment and rehabilita- News-Info, which reported on its website major international oil companies to to convince Ukrainian state leaders to tion at the world-renowned German pump 14 million tons of high-grade light that its sources in Baden-Baden had said agree to the project is that the pipeline – health resort, rumor had it that he had President Kuchma died on an operating sweet crude from the Caspian region to completed and ready for utilization back died. The corollary to that rumor was Europe annually, beginning with 5 mil- table in Baden-Baden. in May 2002 – has sat idle since then, that, naturally, the death was being kept For years, Ukraine’s controversial state lion to 6 million tons next year, should while Ukraine has attempted unsuccess- secret from the public. leader has been the subject of rumors on all the details regarding the oil pipeline fully to lure international oil companies, Kyiv’s notoriously famous rumor mill his impending demise from cancer alter- and the disputes surrounding it be settled. many from the United States, to commit – developed during the Soviet era when nately, the rumors have had him suffering Andrii Kliuyev, recently appointed vice to using the pipeline to transport Caspian the only thing you knew for certain was from most of its virulent forms, including prime minister of Ukraine’s energy sector, high-quality light sweet crude. that what you were told in the press was stomach, intestinal, throat and thyroid who was present at the signing ceremony, Rejecting TNK-BP assertions, an eco- most likely a lie – was working overtime cancers. which was held in Warsaw, noted after- nomic analyst and an executive of late last week. In the end, he has always showed up at wards that the agreement was the first tangi- UkrTransNafta told The Weekly in sepa- By early evening on January 15, his next press conference looking full of ble step in completing the pipeline from the rate interviews they see absolutely no Kyiv’s bazaars, kitchens and cafés were vigor and health. Ukrainian border town of Brody to Plotsk in benefit for Ukraine in bending to TNK- filled with talk of the demise of the coun- The latest rumor no doubt arose from the next phase and on to the Polish port city BP demands and agreeing to a three-year try’s president.
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