Yushchenko highlighted a series of energy-related investment options to his high-level international audience in Davos, scene of the annual gathering of world leaders. Projects included transporting Caspian oil to EU countries via Ukraine and construction of a new oil refinery in Ukraine to work with Caspian Sea oil. In reference to the recent political turmoil which has dominated international coverage Ukraine Yushchenko was at pains to stress the stability of the country, assuring potential investors that political situation in Ukraine is currently stable, safe and favourable for investment. He also was encouraged by a pledge from US Secretary of State Condoleezza Rice that the United States would participate in a planned energy summit which is set to take place in Kyiv in early May.
Attempting to bypass Russia
The Kyiv summit is aimed at gaining more political and business support for the project of moving oil extracted from the Caspian Sea to markets in Ukraine and the European Union via networks that will bypass Russia. The summit is expected to be attended by high-ranking officials from regional countries including Azerbaijan, Georgia and Poland. American participation is particularly welcome as Ukraine strives for greater energy independence because major US oil companies ExxonMobile and ChevronTexaco are currently among the biggest producers of Caspian Sea oil extracted in Kazakhstan.
Any new energy alliances would give Ukraine significantly more leeway in its dealings with the Kremlin, which has repeatedly used Russian dominance of the regional energy markets to exert pressure on Kyiv and derail Orange coalition attempts to step up the pace of the country’s Euro-Atlantic integration.
New life in old pipeline?
Ukraine has long talked of supplying Caspian crude through the Odessa-Brody pipeline, which was actually completed in 2001 but has been lying idle for much of the intervening period or has actually witnessed a flow reversal in 2004 which saw it transport Russian crude to the Odessa port for export. Political considerations have seen successive governments fighting over the pipeline, with Russian interests often succeeding in dominating the debate, but early last week Ukraine’s Fuel and Energy Minister Yuriy Prodan ordered the country’s oil officials to urgently investigate the possibility of using the 674-kilometre pipeline to carry supplies to European markets. Last December, Ukraine secured the strong backing of Poland for a new reversal of the pipeline flow and received support for plans to extend the Odessa-Brody pipeline into Poland and the Baltic.
