In 2009, Russian natural gas company Gazprom refused to conclude a supply contract unless Ukrainian gas company Naftogaz paid its accumulating debts for previous gas supplies.[1] The dispute began in the closing weeks of 2008 with a series of failed negotiations, and on January 1, 2009 Russia cut off gas supplies to Ukraine.[2] On January 7 the dispute turned to crisis when all Russian gas flows through Ukraine were halted for 13 days, completely cutting off supplies to Southeastern Europe, most of which depends on Russian gas, and partially to other European countries.[3]
Throughout the crisis the Russian and Ukrainian sides blamed each other for the cutoff. On January 11 and 12, the European Union deployed an independent monitoring mission in an attempt to solve the crisis, but the mission met with little success. On January 12, Gazprom announced that it was willing to start delivering gas through the Sudzha metering station into the pipeline that traverses Ukraine towards Southeastern Europe, but Ukraine refused the offer for technical reasons and instead suggested an alternative route through Valuyki and Pisarevka metering stations, additionally insisting that supplies be fully restored. This was refused by Gazprom.[3][4]
Gas flows to Europe restarted on the morning of January 20, and were fully restored within two days.[3][8] In the aftermath, Gazprom was estimated to have lost US$1.5billion in revenues due to lack of sales, and Ukraine was speculated to have incurred major economic losses.[9] Analysts point out that the crisis had a negative and possibly irreversible impact on the reputations of both Russia as an energy supplier, and Ukraine as a transit country. There is no consensus amongst analysts on who bore the most responsibility for the crisis. Due to the absence of international monitors on both sides of the Ukrainian pipeline system, it is impossible to determine with certainty who was responsible for interrupting gas flow to Europe.[3]
Background
President Medvedev meets with Gazprom CEO Alexei Miller in his office in the Kremlin (July 21, 2008)
Throughout 2008 there were numerous contract and pricing disputes between Russian and Ukrainian gas/transit companies. In October 2008, Ukrainian Prime MinisterYulia Tymoshenko and Russian Prime MinisterVladimir Putin signed a deal that included provisions to raise import prices and transit tariffs to "market, economically based and mutually agreed levels" within three years, and that Naftogaz would buy gas directly from Gazprom and be the sole importer to Ukraine, removing intermediaries. In November, Gazprom and Naftogaz signed a long-term contract with similar provisions; however, this document differed in that it referred to transit fees remaining at their 2008 level and didn't specify an import price.[3][10]
In the third week of November, Gazprom CEO Miller announced that if no agreement was reached by the end of the year, prices could rise significantly higher than what was currently being proposed. A few days later Prime Minister Putin warned that if there was any interference with transit gas, supplies to Ukraine would be cut off. These warnings were repeated throughout December, with additional warnings that disruptions to European supplies could result. The European Commission did not attempt to intervene, but the Energy Charter Secretariat issued a statement on December 23 which recalled the principle of uninterrupted transit. This was seen as a reminder to Ukraine of its obligations under the Energy Charter Treaty, which it has signed and, unlike Russia, ratified.[3]
Large amounts of debt remained outstanding by year's end. Naftogaz CEO Vladimir Trykolych said that Naftogaz owed $1.26–1.27billion to RosUkrEnergo in total, but claimed that Naftogaz had no debt to Gazprom.[11] However, on December 2, Naftogaz acknowledged that it owed $1billion to Gazprom, and said it was having trouble making payments on time due to unexpected losses in 2008. Later in mid-December, Gazprom stated that a debt of $2.195billion had accumulated. In response, Naftogaz made a payment of $800million, and promised to pay another $200million soon. Gazprom proposed to make an upfront transit payment at the 2008 rate in order to provide funds for the debt to be cleared, but Naftogaz rejected the offer.
On December 19, Gazprom released a statement saying that no supply contract could be signed for 2009 because Ukraine said it would not make any more payments in 2008. This was denied by a Naftogaz spokesman. On the same day, Ukrainian PresidentViktor Yushchenko's spokesman on international energy security stated that Ukraine had paid for its October and September supplies, and that although it still had to pay for November's supply before the end of 2008, no other payments would be due until the end of January.[3] On December 23, President Yushchenko said that part of the debt was restructured for January – February 2009, but Gazprom denied that there was any such agreement and said that it remained committed to cut supplies to Ukraine on January 1 if Ukraine did not pay its remaining $1.67billion debt for gas supplies and an additional $450million in fines.[1][12]
By December 30, Naftogaz made a payment of $1.522billion to RosUkrEnergo for outstanding gas deliveries.[13] RosUkrEnergo confirmed receiving this payment but said that Naftogaz still owed $614million in fines,[14] (although later on January 2, Naftogaz insisted that no further amounts of debt were outstanding, and said it was ready to go to international arbitration to resolve the issue). Along with the payment, the chief executive of Naftogaz, Oleh Dubyna, wrote a letter to Gazprom threatening that if it delivered gas for transit to Europe, Naftogaz would consider the gas to belong to an "unidentified owner" and could confiscate it under Ukrainian customs law. This was received as a threat to divert gas as Ukraine had done during the 2006 gas dispute.[3]
On December 31, after which gas supplies to Ukraine would be cut off, the two parties failed to come to an agreement on import and transit prices, and obstacles remained. Naftogaz promised to transit gas to Europe even if supplies to Ukraine were cut, however, it added that without a contract in place it would not supply technical gas and would instead take gas from Russia's volumes to keep the system functioning. Gazprom refused, arguing that this would be theft.[15]
Crisis
Gas supplies to Ukraine cut off
Deliveries of 90 mmcm (million cubic meters) of natural gas per day designated to Ukraine were fully cut on January 1, 2009 at 10:00 MSK. Transit deliveries to the EU continued at a volume of 300 mmcm per day.[citation needed] President Yushchenko and Prime Minister Tymoshenko, in a joint statement, confirmed that Ukraine guaranteed the uninterrupted transit of gas to Europe. They also promised that Ukrainian citizens would be provided with gas in full volume from Ukraine's gas storage facilities.[14] According to Viachaslau Herasimovich, energy analyst at independent think-tank CASE Ukraine, Ukraine had enough natural gas to last between 100 and 110 days without Russian gas (reserves in underground storage were enough to last about 80 days, plus extra days from the amount of gas Ukraine itself could produce before the exhaustion of existing reserves).[16]
On January 3, Naftogaz claimed that Gazprom had not paid the transit fees since January 1 and owed it $40million.[19][20] According to Gazprom, the transit fee was based on a long-term contract which was signed by both parties on June 21, 2002, and would expire at the end of 2013.[21]
On January 4, two days after gas supplies to Europe were first reported to be falling,[22] the Czech EU Presidency, on behalf of the EU, made a statement calling for an "urgent solution" to the dispute, and for an "immediate resumption" of full deliveries of gas to the EU member states. According to the statement, "energy relations between the EU and its neighbours should be based on reliability and predictability."[23] On the same day both RosUkrEnergo and Gazprom filed lawsuits against Ukraine and Naftogaz respectively with the Stockholm Tribunal of the Arbitration Institute of the Stockholm Chamber of Commerce.[24][25] Russia and Ukraine also said they would file lawsuits at the arbitration court.[26]
On January 5, Kyiv's economic court ruled to ban Naftogaz from transiting Russian gas in 2009 at a price of $1.60per 1,600cubic meters per 100kilometers. The court decided to satisfy a ministry appeal that declared ineffective agreements on Russian gas transit via Ukraine "because the agreements were signed by the former deputy head of the Naftogaz Ukrainy board, Ihor Voronin, who was not empowered by the Cabinet of Ministers of Ukraine to do that", according to the statement.[27]
On January 5, in a televised conversation between Prime Minister Vladimir Putin and Gazprom CEO Alexei Miller, Putin agreed with a proposal by Miller to reduce gas flows to Europe via Ukraine. Putin elaborated that the gas flow should be reduced by the amount Ukraine had allegedly stolen since deliveries ended on January 1, and instructed Miller to inform Gazprom's European partners.[2][28]
On January 6, Gazprom deputy CEO Aleksandr Medvedev stated at press conferences in both London and Berlin that Ukraine had blocked three of the four transit lines "in an unprecedented and unilateral move". Naftogaz denied the accusation and said it had used its own gas for technical purposes. PresidentYushchenko stated that during the course of the day Gazprom had sharply cut supplies to Europe via Ukraine from 262 mmcm to 73.6 mmcm. Later a Gazprom spokesman stated that Gazprom had only put 64.7 mmcm into the system, and that it was expecting Ukraine to make up the remaining 65.3 mmcm needed to make the total order of 130 mmcm.[28] In a telegram sent to the leadership of the European Union and heads of European states that consume Russian natural gas, President Yushchenko said "Ukraine consumes only the gas it produces itself and gas pumped into Ukrainian storage facilities, which has been paid for in full". The president also claimed that Russia planned to stop or significantly reduce Russian gas transit through Ukraine.[29]
On January 7, all Russian gas flow through Ukraine was halted, completely cutting off supplies to Southeastern Europe, much of which is completely reliant on Russian gas, and partially to other parts of Europe. Miller stated that Gazprom had stopped all gas deliveries to Ukraine because Ukraine had closed the system down, but Naftogaz said it closed down the system because Gazprom had stopped delivering gas.[28] Prime Minister Putin accused Ukraine of blackmail; Ukraine denied the charges and blamed Russia for stopping gas deliveries to Europe.[30] According to the Ukrainian presidential envoy for international energy security, Bohdan Sokolovsky, Ukraine had no technical capability to stop the pumping of Russian gas into its territory. He claimed that all pumping stations through which gas is supplied to Ukraine are located in Russia.[31]
On January 8, the European Union released a six-point declaration. The declaration stated that Russia and Ukraine had failed to show sufficient determination in solving the problem which was damaging to both their reputations. It urged both Russia and Ukraine to fulfil their respective obligations as supplier and transit country and to immediately restore gas supplies to Europe. It also requested that both parties accept independent monitoring of the flow of gas in the pipelines.[32] Later in the day officials from Gazprom and Naftogaz met with EU officials in Brussels to look for an end to the crisis.[33] Ukraine agreed to guarantee the unimpeded transit of natural gas on the condition that Gazprom would guarantee and supply the technical gas that was required for the system to function, but this was rejected by Russia, as it considered this the responsibility of Ukraine.[34]
On January 11, Putin stated that Russia was willing to take part in the privatization of Ukraine's gas transport system if Ukraine agreed. He also suggested that the EU should lend Ukraine the cash to pay off its debts.[citation needed]
EU monitoring agreement
On January 7, after Russian gas deliveries to Europe through Ukraine were completely halted, German ChancellorAngela Merkel phoned both the Russian and Ukrainian prime ministers and reached an agreement with them that "experts from the European gas industry and the EU be sent quickly to determine on both sides of the Russia–Ukraine border..the cause of the transmission problems". For the next four or five days the commission focused on coming up with terms of reference for an agreement to be signed by all parties.[35]
On January 9, the Gas Coordination Group met and discussed different measures to help the situation, including temporary increases in production, increasing storage withdrawal, fuel switching, and increasing LNG imports.[35]
On January 10, the EU continued talks with Russia to finalize details of the written protocol. After several hours of negotiations, Czech Prime MinisterMirek Topolánek and Prime Minister Putin reached an agreement on conditions for the monitoring arrangement. European CommissionerAndris Piebalgs confirmed that he was also ready to sign the agreement, which left only Ukraine's signature needed in order to start the monitoring operation.[36]
On January 11, Topolánek flew to Kyiv where he presented the agreement to Ukrainian representatives, and Ukraine signed the protocol. However, Prime Minister Tymoshenko added the handwritten words "with declaration attached" next to her signature.[35] The added declaration included, among other things, a clause asserting that Ukraine did not steal gas earmarked for Europe, a demand that Russia must provide Ukraine with 21 mmcm of technical gas daily, free of charge, and that Ukraine had no outstanding debts to Gazprom,[37] effectively blaming the Russian side for the crisis. Russia was not willing to accept this, and another day was lost.[citation needed] Topolánek later told Putin during a telephone conversation that Ukraine's declarations were non-binding and only represented the opinion of Ukraine, but Putin asked Topolánek to send Russia a protocol without any additions and declarations.[38] After a phone call by European Commission PresidentJose Manuel Barroso that same day, Tymoshenko agreed to separate the two documents.[39]
On January 12, all three parties re-signed the protocol without any amendments and monitors were deployed.[40] The monitoring mission included the EU Commission's officials, experts from the European gas companies, such as E.ON Ruhrgas, Eni and GDF Suez, as well as representatives of Gazprom, Naftogaz, and the Ukrainian and Russian energy ministries.[41] Originally Ukraine did not accepted Gazprom's demand to include Gazprom's experts in the mission, but the objection was later withdrawn.[42] This arrangement was criticized by the Deputy Foreign Minister of Ukraine Kostyantyn Yeliseyev, who said that Ukraine risked losing control over its gas transit system with the inclusion of monitors from European companies in which Gazprom is a shareholder. He claimed it was "another attempt by the Russians to deprive Ukraine of its entire gas transit system."[43]
Attempts to restore gas supplies
Although international monitors had been deployed, it became clear by the next day that they would have nothing to monitor, as mutual accusations between Russia and Ukraine over who was responsible for blocking gas flow continued. The Russian side claimed that its attempts to restore gas flow were still being blocked, while the Ukrainian side argued that no supplies could be received because no technical agreement had been reached between the parties.[44] Naftogaz sent a letter to Gazprom CEO Alexei Miller arguing that Gazprom was not only responsible for supplying technical gas, but also additional linepack gas of 140million cubic metres (4.9billion cubic feet) in order to restart the system.[45]
On January 12, Gazprom announced that it was ready to start delivering gas through the Sudzha metering station that traverses Ukraine towards Southeastern Europe, but Ukraine refused the offer, claiming this would have left its eastern regions of Donetsk, Luhansk and portions of Dnipropetrovsk starved of gas.[46] Naftogaz suggested an alternative route through the Valuyki and Pisarevka metering stations, but later added that it was unprepared to partially accept gas for transfer to Europe. It insisted that deliveries be fully restored because the system had been partially reconfigured to work in reverse in order to supply consumers in eastern Ukraine with backup supplies, and European transit pipelines were working in such a way that they were unable to accept Russian gas for transit to Europe without cutting off those eastern regions.[28] Naftogaz added that a resumption of transit would require conclusion of a technical agreement. According to a report by the Oxford Institute for Energy Studies: "This reversal of one of the world’s largest gas transit systems was unprecedented. It seems hard to believe that it could have been undertaken spontaneously, which suggests that, whichever side precipitated the shutdown, Naftogaz's engineers had prepared for it."[28] Gazprom rejected this counterproposal, saying that the Valuyki and Pisarevka routes were unsuitable for deliveries to Europe.[47]
On January 17, Russia held an international gas conference in Moscow, inviting the heads of states and governments of all countries buying or transporting Russian gas. The proposal was met with little enthusiasm, but the EU stated that it would attend under the precondition that Ukraine's participation was ensured.[48] Ukraine agreed and was represented by Prime Minister Tymoshenko, who was given full mandate at the talks.[49] The EU was represented by the Czech Minister of Industry and Trade Martin Říman and the EU Energy Commissioner Andris Piebalgs.[48]
The summit did not achieve a solution to the crisis, but negotiations continued bilaterally between prime ministers Putin and Tymoshenko afterwards.
On January 18, after a day of talks, Putin and Tymoshenko reached a deal on restoring gas supplies to both Europe and Ukraine. The parties agreed, among other things, that Ukraine would get a 20% discount for 2009 gas supplies on condition that the tariff for transporting Russian gas to European consumers through Ukraine remained at 2008 prices for the duration of the year, and that starting on January 1, 2010, all prices and tariffs would move to European standards, without any exemptions or discounts.[50] The two sides also agreed to stop using intermediaries, referring to RosUkrEnergo, a company joint owned by Gazprom and two Ukrainian businessmen.[51] The next day, the head of Gazprom, Alexei Miller, along with the head of Naftogaz, Oleh Dubyna, signed the agreement, and Putin announced that he had ordered Gazprom to start deliveries in full volume and through all necessary routes.[52] Additionally, the claim of a $600million debt owed to RosUkrEnergo by Naftogaz was dropped.[53] The deal was to remain in force until the end of 2019.[54]
On January 20, gas deliveries to both Ukraine and Europe resumed, and within two days, volumes were fully restored.[3]
According to the agreement, Ukraine would pay $360/mcm (thousand cubic meter) for the first quarter of 2009, and each following quarter would be based on the price formula. Additionally, Ukraine must pay for supplies for any given month by the seventh day of the following month. If payment is late, Ukraine has to pay in advance, which could also be grounds to nullify the agreement.[55]
The agreement was altered on November 20, 2009 after a meeting between Tymoshenko and Putin in Yalta; Ukraine would not be fined for buying less gas than what the original agreement stipulated. The change was made due to the Great Recession.[56]
Impact on Europe
On January 2, a day after Russia cut off gas supplies to Ukraine, Hungary, Romania and Poland were the first countries to report that pressure in their pipelines had fallen. Bulgaria reported that their supply was also falling and that transit to Turkey, Greece and North Macedonia was affected.[22] Two days later the Czech Republic and Turkey reported drops in pipeline pressure.[26] Starting on January 7, several countries began to report a significant drop in gas supplies from Russia. Throughout the crisis many countries were unprepared and had been left without supplies for days, leading to significant economic and humanitarian consequences; Bulgaria was forced to stop production in some of its important industrial plants, while one country, Slovakia, declared a state of emergency.[57] The most severely affected countries were in Southeastern Europe, most of which rely completely on Russia for gas and at the time didn't have sufficient alternative energy sources. However North-West Europe wasn't much affected by the cutoff and none of Europe's major markets came close to cutting off customers. Many European countries had made investments since the 2006 crisis which put them in a better position.[58]
The following table displays the gas situation in each of the affected countries at the time of the crisis:[58]
None of Gazprom's European clients have sued Gazprom for irregularities in gas shipments in January 2009, hence Gazprom suspended its litigation with Naftogaz Ukraine at the Arbitration Institute of the Stockholm Chamber of Commerce over alleged violation of contractual terms on transiting natural gas to Europe by Naftogaz late December 2009.[60]
Impact on Russia and Ukraine
Both Russia and Ukraine claimed to have emerged triumphant from the dispute, but both countries sustained major blows to their economies during the Great Recession.[9] Gazprom was estimated to have lost about $1.5billion in revenues due to lack of sales,[61] while Ukraine lost an estimated $100million in transit fees and was speculated to have incurred major economic losses due to much of its industry, the backbone of its economy, being temporarily shut down.[9] Analysts pointed out that the crisis and the way it was handled had a negative and possibly irreversible impact on the reputations of both Russia as an energy supplier, and Ukraine as a transit country. According to the Czech foreign minister, "The main lesson learned from this crisis is that Russia and Ukraine aren’t reliable suppliers. Europe must think about alternative sources and pipelines."[62] The President of the European CommissionJosé Manuel Barroso similarly expressed during the crisis that by failing to honor supply agreements Russia and Ukraine could no longer be considered reliable energy partners.[63]
Despite calls for European energy diversity being amplified as a result of the crisis, Russia's European customers have long term legal contracts for gas deliveries. Most of these contracts stretch beyond 2025–2030 and obligations to these contracts remain despite the crisis. Thus European countries can do little in the short-medium term in the ways of diversification away from Russian gas, but diversification of delivery routes away from Ukraine could potentially be achieved within a few years via projects such as the South Stream and Nord Stream 1 pipeline systems.[61][62]
Technical gas and accusations of stealing
Gas required to run the compressor stations is known as "fuel gas" worldwide, or "technical" gas in the former Soviet Union. The customary practice is that this gas is provided by the transport/transit company and included in the tariff charged to the shipper (i.e. there is no separate price or tariff charge for this gas). With no contract in place this became a point of contention.[64] According to Heinz Hilbrecht of the European Commission Directorate-General for Transport and Energy, it was Ukraine's responsibility to supply the necessary technical gas,[65] but Naftogaz insisted this was the responsibility of Gazprom.[66]
A day after Russia cut off gas flows to Ukraine, Gazprom accused Ukraine of stealing gas.[67] On January 3, Naftogaz issued a statement saying that it would take the necessary gas from volumes that were bound for Europe as technical gas, at a rate of 23 mmcm (million cubic meters) a day. It argued that this was the amount specified in the last transit contract signed in 2002, which covered 2003–2013.[64] The Ukrainian President's representative for energy issues said that problems for Europe would arise within 10 days without gas volumes necessary for maintaining pressure in the pipeline system.[22] However a Gazprom spokesman defined taking technical gas from Russian volumes as stealing, and announced that Gazprom would take the matter to international arbitration court in Stockholm; in a press release on January 4 he claimed that 50 mmcm of gas had already been stolen this way.[64]
On January 7 Gazprom claimed that since the beginning of 2009, Ukraine had stolen more than 86 mmcm of gas. Naftogaz acknowledged that it had taken a certain amount of gas, but claimed the amount taken was only 52.2 mmcm, and reiterated that it was entitled to take this gas in order to maintain full operation of the network.[67] Ukraine also accused Moldova of siphoning Russian gas destined for Southeastern Europe. Moldova denied the allegation.[68]
On January 15, Prime Minister Putin in collaboration with Paolo Scaroni, CEO of Italian energy company Eni, made a proposal to create a consortium of European utilities that would temporarily solve the crisis by financing the supply of technical gas needed to ensure transit to Europe, but this idea was dismissed as gas supplies were restored shortly thereafter.[69]
On March 30, 2010 a Stockholm Arbitration Tribunal ordered Naftogas to pay RosUkrEnergo around $200million as a penalty for various breaches of supply, transit and storage contracts.[70] On June 8, 2010 the Stockholm Arbitration Tribunal ordered Naftogaz to return 11billion cubic metres (390billion cubic feet) of natural gas to RosUkrEnergo and that RosUkrEnergo would receive from Naftogaz a further 1.1billion cubic metres (39billion cubic feet) of natural gas in lieu of RosUkrEnergo's entitlement to penalties for breach of contract.[70][71] On April 26, 2011 former Ukrainian Prime MinisterYulia Tymoshenko sued Dmytro Firtash and RosUkrEnergo in a U.S. District Court in Manhattan accusing them of "defrauding Ukraine's citizenry by manipulating an arbitration court ruling, "undermining the rule of law in Ukraine" in connection with the 2010 international arbitration court ruling in Stockholm.[72]
During the dispute, several theories about alleged political motives behind the conflict surfaced, while both countries accused each other of political blackmail.[73]
The Times published an article alleging that the key aim of the Kremlin was to stifle the continued expansion of the EU and NATO into Eastern Europe by exposing Ukraine as an unreliable ally.[74] This view was shared by Vladimir Milov, president of the Institute of Energy Policy in Moscow and former deputy energy minister of Russia, who also claimed that Russia was putting pressure on the Ukrainian government for pursuing pro-western goals.[75] The US Ambassador to NATO, Kurt Volker, stated that although it was a commercial dispute, he believed that Russia was using the event to gain political leverage.[76] Contrarily, the Oxford Institute for Energy Studies concluded in a report: "We do not believe that the often-cited desire of the Russian government to use energy as an economic or political ‘weapon' against European countries played any part in this crisis."[61] Although the report also stated that the Russian decision to cut back deliveries on January 5, 2009 "may have reflected Prime Minister Putin’s anger and frustration, and been aimed at punishing Ukraine for its repeated threats to disrupt transit. These emotions may have been personalized to President Yushchenko, given the historical animosity of Russia towards the Orange Revolution and towards Yushchenko’s subsequent policy orientation away from Russia."[61]
According to Fyodor Lukyanov[ru], an editor of the journal Russia in Global Affairs, Ukraine was desperate not to pay more for gas due to the poor state of its economy and believed that the longer the conflict dragged on the more the blame would be laid on Russia, which would give Ukraine a position of strength in negotiating.[77] Gazprom deputy CEO Alexander Medvedev suggested that Ukraine's actions were being orchestrated by the United States. The State Department's spokesman Sean McCormack called the allegation "totally without foundation."[78]
On January 14, Prime Minister Tymoshenko said that an agreement with Russia on prices had nearly been achieved, but had been broken up. She laid blame on RosUkrEnergo's part owner, Dmytro Firtash, former fuel and energy minister Yuriy Boyko, and former head of the presidential administration Sergei Levochkin, who had lobbied against the agreement, and suggested that PresidentYushchenko had been complicit. Shortly after, Boyko countered that Tymoshenko herself had been lobbying in the interests of business owners Igor Bakai and Viktor Medvedchuk. According to Boyko, Tymoshenko had delayed payment of Ukraine's debts in order to arrange for a company owned by Medvedchuk and Bakai to export large volumes of Russian gas.[79]
Public relations efforts
During the conflict both sides tried to win sympathy for their arguments.[77][80] According to Reuters analyst Sabina Zawadzki, Gazprom had become more skilled at fighting a PR war since the previous pricing dispute with Ukraine in 2006. Since that dispute, the Kremlin hired one of the world's largest public affairs firms, Omnicom, and its Brussels unit, Gplus Europe[81] as well New York units, Ketchum Inc. and Stromberg Consulting.[82][83]
According to Tammy Lynch, Senior Research Fellow at Boston University's Institute for the Study of Conflict, Ideology and Policy, one of the PR problems for Ukraine was the fact that most Western media is based in Moscow and maintains regular contact with political and business elites there; Ukraine's interests, even in a dispute like this, are peripheral to the 'big issue' of Russia's relations with Europe.[81]
Another political pressure to Ukraine during the gas conflict, and the fact overlap of gas supplies from Russia, led to the renewal of the civil campaign "Remember the gas - do not buy Russian goods!" on January 1, 2009. In January 2009, variety of different movements carried out the campaigns against Russian policy toward Ukraine, particularly using calls to boycott Russian goods.
PJSC Gazprom is a Russian majority state-owned multinational energy corporation headquartered in the Lakhta Center in Saint Petersburg. The Gazprom name is a contraction of the Russian words gazovaya promyshlennost. In January 2022, Gazprom displaced Sberbank from the first place in the list of the largest company in Russia by market capitalization. In 2022, the company's revenue amounted to 8 trillion rubles.
Yulia Volodymyrivna Tymoshenko is a Ukrainian politician, who served as Prime Minister of Ukraine in 2005, and again from 2007 until 2010; the first and only woman in Ukraine to hold that position. She has been a member of the Verkhovna Rada as People's Deputy of Ukraine several times between 1997 and 2007, and presently as of 2014, and was First Deputy Prime Minister of Ukraine for the fuel and energy complex from 1999 to 2001. She is a Candidate of Economic Sciences.
The Russia–Ukraine gas disputes refer to a number of disputes between Ukrainian oil and gas company Naftogaz Ukrayiny and Russian gas supplier Gazprom over natural gas supplies, prices, and debts. These disputes have grown beyond simple business disputes into transnational political issues—involving political leaders from several countries—that threaten natural gas supplies in numerous European countries dependent on natural gas imports from Russian suppliers, which are transported through Ukraine. Russia provides approximately a quarter of the natural gas consumed in the European Union; approximately 80% of those exports travel through pipelines across Ukrainian soil prior to arriving in the EU.
Nord Stream is a pair of offshore natural gas pipelines in Europe that run under the Baltic Sea from Russia to Germany. It consists of the Nord Stream 1 (NS1) pipeline running from Vyborg in northwestern Russia, near Finland, and the Nord Stream 2 (NS2) pipeline running from Ust-Luga in northwestern Russia near Estonia. Both pipelines run to Lubmin in the northeastern German state of Mecklenburg-Vorpommern. Each pipeline contains two pipes, denoted A and B; each of the four pipes is approximately 1,200 kilometres (750 mi) long and with approximate diameters of 1,220 millimetres (48 in). The combined capacity of the four pipes is 110 billion cubic metres per annum of natural gas.
RosUkrEnergo is a Swiss-registered venture company that transports natural gas from Turkmenistan to East European countries. 50% of the company is owned by Gazprom, through its daughter Swiss-registered Rosgas Holding A.G., and another 50% by Swiss-registered private company Centragas Holding A.G., acting on behalf of a consortium of GDF Group owned by Dmytro Firtash and Ivan Fursin.
Naftogaz of Ukraine is the largest national oil and gas company of Ukraine. It is a state-owned company subordinated to the Government of Ukraine. The vertical-integrated company carries out a complete cycle of exploration operations and development of deposits, operating and exploratory drilling, extraction, transportation, and refinement of natural gas and crude oil, supply of natural and liquefied gas to consumers.
The Russia–Belarus energy dispute began when Russian state-owned gas supplier Gazprom demanded an increase in gas prices paid by Belarus, a country which has been closely allied with Moscow and forms a loose union state with Russia. It escalated on 8 January 2007, when the Russian state-owned pipeline company Transneft stopped pumping oil into the Druzhba pipeline which runs through Belarus because Belarus was siphoning the oil off the pipe without mutual agreement. On 10 January, Transneft resumed oil exports through the pipeline after Belarus ended the tariff that sparked the shutdown, despite differing messages from the parties on the state of negotiations.
Russia's energy policy is presented in the government's Energy Strategy document, first approved in 2000, which sets out the government's policy to 2020. The Energy Strategy outlines several key priorities: increased energy efficiency, reducing the impact on the environment, sustainable development, energy development and technological development, as well as improved effectiveness and competitiveness. Russia's greenhouse gas emissions are large because of its energy policy. Russia is rich in natural energy resources and is one of the world's energy superpowers. Russia is the world's leading net energy exporter, and was a major supplier to the European Union until the Russian invasion of Ukraine. Russia has signed and ratified the Kyoto Protocol and Paris Agreement. Numerous scholars posit that Russia uses its energy exports as a foreign policy instrument towards other countries.
South Stream is a canceled pipeline project to transport natural gas of the Russian Federation through the Black Sea to Bulgaria and through Serbia, Hungary and Slovenia further to Austria. It was never finished.
Oleh Dubyna is a former chairman of the board of the Ukraine's national oil and gas company Naftogaz Ukrainy.
The 2005–06 Russia–Ukraine gas dispute was between Ukrainian state-controlled oil and gas company Naftogaz Ukrainy and Russian national gas supplier Gazprom. The disagreements concerned natural gas supplies, prices and debts. The conflict started in March 2005, ended in January 2006 and, in addition to the gas companies, involved politicians from both countries.
Russia supplies a significant volume of fossil fuels to other European countries. In 2021, it was the largest exporter of oil and natural gas to the European Union, (90%) and 40% of gas consumed in the EU came from Russia.
Ukraine extracts about 20 billion cubic meters of fossil gas each year, and since 2022 this has almost met demand. Ukraine has been estimated to possess natural gas reserves of over 670 billion cubic meters (in 2022), and in 2018 was ranked 26th among countries with proved reserves of natural gas. In 2021, Ukraine produced 19.8 billion cubic meters (bcm or Gm3) of natural gas. To satisfy domestic demand of 27.3 bcm that year, Ukraine relied on gas imports (2.6 bcm) and withdrawal from underground storage (4.9 bcm). Winter demand can reach 150 mcm per day.
Criminal cases against supporters of Yulia Tymoshenko — numerous criminal cases against supporters of Yulia Tymoshenko, which have been launched in Ukraine since May 2010, after the arrival to power of Viktor Yanukovych. In all those cases, the General Procurator's Office does not charge Tymoshenko's associates with «stealing or appropriating funds», none of them were charged with taking or paying bribes — mainly, they are accused of «abuse of office» and «exceeding official powers», see paragraph 2 of the PACE resolution of 27 January 2012. As for those cases, there exist several statements by the EU, the US, the Human Right organizations, public organizations both within Ukraine and from Diaspora which indicate the political constituency of all those cases. Nevertheless, representatives of the Party of Regions insist that «the political constituency» is absent.
The 17 December 2013 Russian–Ukrainian action plan was a de facto defunct proposed agreement between the Russian President Vladimir Putin and former Ukrainian President Viktor Yanukovych publicized on 17 December 2013 whereby Russia would buy $15 billion of Ukrainian eurobonds to be issued by Ukraine and that the cost of Russian natural gas supplied to Ukraine would be lowered to $268 per 1,000 cubic metres. The treaty was signed amid the escalating Euromaidan movement which sought closer ties between Ukraine and the European Union. The interest rate on the loan would be renegotiated every three months, based on a verbal agreement between the two leaders.
In 2021 Russia was the world's second-largest producer of natural gas, producing an estimated 701 billion cubic meters (bcm) of gas a year, and the world's largest natural gas exporter, shipping an estimated 250 bcm a year. In 2022 the export market was significantly downsized, following the Russian invasion of Ukraine and Russia reducing exports after countries refused to pay in rubles.
Andríy Kóbolyev is a Ukrainian politician and businessman, and the former chief executive officer of Ukrainian largest company, the state-owned oil and gas company Naftogaz. In October 2014, Kobolyev was named a global "Top 40 under 40" leader by Fortune in recognition of his anti-corruption reform successes.
The Russia–EU gas dispute flared up in March 2022 following the invasion of Ukraine on 24 February 2022. Russia and the major EU countries clashed over the issue of payment for natural gas pipelined to Europe by Russia's Gazprom, amidst sanctions on Russia that were expanded in response to Russia's 2022 invasion of Ukraine. In June, Gazprom claimed it was obliged to cut the flow of gas to Germany by more than half, as a result of such sanctions that prevented the Russian company from receiving its turbine component from Canada. On 26 September 2022, three of the four pipes of the Nord Stream 1 and 2 gas pipelines were sabotaged. This resulted in a record release of 115,000 tonnes of methane(CH4) – an equivalent of 15 million tonnes of carbon dioxide(CO2) – and is believed to have made a contribution to global warming.
As part of the sanctions imposed on the Russian Federation as a result of the Russo-Ukrainian War, on 3 December 2022, the European Union (EU) agreed to cap the price of natural gas in order to reduce the volatility created by Russia in the gas market.
The Lukoil oil transit dispute is an ongoing international relations dispute between Ukraine and the European Union at odds with Hungary and Slovakia regarding the allowance of the pipeline transfer of Russian oil through Ukrainian territory. The diplomatic standoff arose when Ukraine imposed sanctions on Lukoil — Russia's largest private oil firm — effectively halting oil supplies to Hungary and Slovakia via the Druzhba pipeline, which the latter two nations stated would lead to an energy crisis and economic collapse. In response, Hungary and Slovakia complained to the European Commission while threatening to halt military aid shipments, energy, and diesel supplies to Ukraine.
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