Russia

With An Eye On Ukraine, Russia Cuts Major Gas Deal With Belarus

Russia has just reached a deal that gives Belarus discounted natural gas in exchange for control of the satellite country’s Beltransgaz utility. Will the agreement encourage Ukraine to the same?

Russia supplies much of the natural gas used in Europe
Russia supplies much of the natural gas used in Europe

Worldcrunch NEWS BITES
KOMMERSANT

MOSCOWRussian authorities have just offered Belarus what only days before it denied Ukraine: a deal for discounted natural gas. The Belarus deal is the latest twist in Europe's ongoing energy security dispute.

A quarter of the European Union's gas comes from Russia, most of which moves first through Ukraine, whose last dispute in 2009 with Moscow saw gas supplies cut off, affecting tens of millions of people.

Russian Prime Minister Vladimir Putin justified the agreement on the fact that Belarus is part of a trade union with Russia and Kazakhstan - a group that Ukraine has refused to join. But the Russian premier said also that under the terms of the deal, Moscow will also gain control over Beltransgaz, a state gas company. Russian monopoly Gazprom currently only owns 50% of Beltransgaz.

Until now, negotiations had been at an impasse but Putin said: "We hope that the lowering of the cost of gas for Belarus can be synchronized with getting the second part of Beltransgaz."

The exact discount will be the subject of further talks. Regardless of the amount, Gazprom will reportedly earn less profit from Belarus than it does from its European neighbors.

The announcement, which followed a meeting in Moscow, will exert pressure on Ukraine to strike a similar deal with Russia. Gazprom has long been trying to get a stake in Ukraine's Naftogas to ensure an uninterrupted gas supply to Europe. But Ukraine has refused, saying such a deal would undermine its sovereignty.

The head of RusEnergy, Mikhail Krutikin, said the move was simply a way to pressure Ukraine and hopefully avoid yet another energy dispute this winter. Complicating matters are uncertainty over alternative gas pipelines under construction, such as the Nord Stream and the South Stream.

"If we fail to strike a deal with Ukraine before the end of the year, we may see a repetition of the gas conflict with the consequences of gas cuts," Krutikin said.

Read the full article in Russian by Dimitry Belikov

Photo - s.lavr

You've reached your monthly limit of free articles.
To read the full article, please subscribe.
Get unlimited access. Support Worldcrunch's unique mission:
  • Exclusive coverage from the world's top sources, in English for the first time.
  • Stories from the best international journalists.
  • Insights from the widest range of perspectives, languages and countries
Already a subscriber? Log in
Keep up with the world. Break out of the bubble.
Sign up to our expressly international daily newsletter!
Geopolitics

The New Iraq, Signs Of Hope Amid The Rubble And Reconstruction

How do you rebuild a country decimated by four decades of war and embargoes? Following the withdrawal of the U.S. military, Iraq faces many challenges, from oil revenues captured by the militias and endemic corruption to religious segregation. However, there are glimmers of hope for the country's future.

Street scene in Erbil, Iraq

Théophile Simon

BAGHDAD — With a vast office located at the top of a tower fiercely guarded by the army and a bell to call the staff, Khalid Hamza Abbas is obviously a powerful character, decked out in an impeccable suit. Abbas runs the Basra Oil Company (BOC), the national company responsible for the exploitation of the oil fields in the province of Basra, in the very south of Iraq, from which four million barrels of crude oil flow daily. It’s the equivalent of 4% of world demand and 65% of central government revenue concentrated in a region of only four million inhabitants.

As he explains the profit-sharing scheme between the world’s major oil companies and his public enterprise, the 50-year-old with thin glasses is suddenly stopped dead in his tracks by the ringing of his telephone. He tries a joke to mask his suddenly worried face: "I'm going to ask you to leave my office for a few moments. If I haven't called you back in 10 minutes, call the police."

Keep reading... Show less
Keep up with the world. Break out of the bubble.
Sign up to our expressly international daily newsletter!
You've reached your monthly limit of free articles.
To read the full article, please subscribe.
Get unlimited access. Support Worldcrunch's unique mission:
  • Exclusive coverage from the world's top sources, in English for the first time.
  • Stories from the best international journalists.
  • Insights from the widest range of perspectives, languages and countries
Already a subscriber? Log in
THE LATEST
FOCUS
TRENDING TOPICS
MOST READ