Saturday, August 9, 2014

Has #Ukraine lost all control of ever achieving energy independence? ( Article 14.15 )

Ukraine sold off its energy sector to Westerners

To avoid permanent iron arm with its supplier of Russian gas, Ukraine has decided to use its own energy resources by using foreign capital non-Russian. However, because of widespread corruption within the state, the cure is worse than the disease: multinationals will be able to plunder the country without make energy self sufficient.
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President Viktor Yanukovych and Energy Minister Eduard Stavytsky sign an operating agreement in Davos with Dutch Prime Minister Mark Rutte, and the boss of Royal Dutch Shell, Peter Voser.
Wilful blindness by Ukraine of the Eurasian Union, the stagnation of gas negotiations with Russia pushing the Ukrainian government to seek a solution for the country's energy independence. The research results gradually through agreements with Western multinationals. The willingness of the Ukrainian government raises a rather obvious question: at what price will Ukraine achieve energy independence and is this goal capable of being be achieved ?
 

$ 207 billion on the altar of energy independence

Experts from the International Energy Agency (IEA) estimated the price to be paid by Ukraine to achieve energy independence; they consider it to $ 207 billion. They included in this sum modernization of existing businesses, increased volumes extracted from coal and natural gas, the development of gas fields in the Black Sea, but also the beginning of the exploitation of shale gas.


   

Ukraine is absolutely unable to bear such expenses - it lacks the same money for social spending.
In these circumstances, the State can not even implement development programs, in any area whatsoever.  

Therefore, the Ukrainian elite has only one solution: to fall into economic dependence vis-à-vis the West by offering ownerships between Ukraine and Multinational Corps.. Today, three of them are present in the Ukrainian energy market: Exxon-MobilChevron  and Royal Dutch Shell.

The share of Exxon Mobil

Majors Exxon/Mobil (USA), Shell (Pys Netherlands, UK) and Petron (Philippines) received the right to extract natural gas "area Scythian" Ukrainian offshore fields (see map below) [ 1 ]. The participation of the Ukrainian national company Deepholm (Nadra Ukraina) boils down to the provision of technical documents. The production will be divided as follows: 70% to foreign investors, 20% to the Ukrainian state and 10% to intermediaries. This is an unknown company, geoservice Tchaoud [ 2 ] that the power put into the game.
  Resulted in giving this area to multinationals, and Ukraine received almost nothing in return.
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The arrival of Royal Dutch Shell

On 10 January 2013, the American ambassador to Ukraine and the Minister of Energy and National Coal Staviski Edward met and agreed on the timing of signing of the production sharing between Ukrainian government and Royal Dutch Shell and Chevron. They did not trail - and the agreement with Royal Dutch Shell signed to date, but was kept secret by both the Ukraine by the company itself -. However, there was a leak and the text of the preliminary agreement became accessible to all on the web [ 3 ].
 
How has Ukraine been able to bring Shell into their natural resources so dominantly? This company is only interested in the extraction of gas and oil shale. Not the laws "On Sharing Agreements & production" where the expected production is divided between the state and the investor due is a  70/30 proportion.

 But in the text of the agreement itself, Article 14.15, it is expected that the share of production reserved for Shell will reach 31 to 69% in connection with several criteria. Thus, the share of the Ukrainian state in the production of oil shale directly depends on expenditures of Shell's volumes extracted and taxes paid to the Treasury.

 However, the company Shell can easily manipulate an increase its total spending, and there by  potentially extend the opening that quite possibility can change the maximum time it takes before Ukraine will receive 69% of the gas due to it.
 
The agreement also provides an opportunity for Shell to export oil extracted without limits and to freely decide the fate of profit and generate such export these capital from Ukraine without state control on the movement of funds . Finally, the fact that Shell has been exempt from tax was not a factor irrelevant. 

Satiate the appetite of Chevron

On the territory of Ukraine there is still a hydrocarbon bearing shale that is not yet developed, "the area of ​​Olessk" in the western part of the country, in the regions of Lviv and Ivano-Frankivsk. It is expected that this area be transferred to Shell. Since the interests of the Dutch company Shell were included, those of Chevron were previously ignored.
 
After the operating permit for the area of ​​Olessk should happen soon-now, geopolitical and geo-economic interests of the West in the territory of Ukraine are fully insured.
After the final entry of Western Multinationals in the Ukrainian market, the country, according to the special envoy and coordinator for the State Department US Carlos Pascual, could "potentialy turn Western Multinationals into a powerful energy provider for Eastern Europe," and would obviously become a counterweight to Russian Energy Suppliers.

 

Conclusions

By refusing to participate in the Eurasian Union however, the former Ukrainian politicians had chosen the complete transfer of the remains of their sovereignty to Western multinationals, allowing them access to the extraction of hydrocarbons in the country.
   
Concluding agreements with ExxonMobil, Chevron and RoyalDutchShell, Ukraine has lost control of its offshore oil and gas reserves and shale without achieving energy independence.
  
 In addition, following the beginning of the extraction of shale gas after 2015, four Ukrainian regions may become unsuitable for agriculture; problems with the supply of drinking water for 10 million people are likely.  

All this happened on the background of the corrupted Ukrainian political system and "after an election another in the elites ," between which the national political elite, are very concerned about staying in power at any price, is absolutely not ready to discuss the future of Ukraine within the Eurasian integration.

 Yet it is precisely this discussion framework that raises the question,: is  that energy independence is so essential to the Ukraine? Then if gas is to be $ 185 [ 4 ] for any conditions, will it always be more profitable using its own hydrocarbons extracted by foreign multinationals as the self interests of the one-sided agreements they have now signed away?

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