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Russia/Ukraine: Origins Of Putin's 'Revolutionary Development' A Mystery

(RFE/RL) February 21, 2007 (RFE/RL) -- Russian President Vladimir Putin stirred up a hornet's nest when he publicly announced earlier this month that the Ukrainian government had approached Russia with the idea of unifying the countries' respective gas-pipeline networks.

Putin hailed the overture, coupled with Ukrainian interest in drilling for natural gas on Russian territory, as a "revolutionary development" that was in the "interest of both countries."

Circling The Wagons

Ukrainian officials and lawmakers responded quickly to Putin's comments, made on February 1 to reporters assembled for the annual Munich Conference on Security Policy.

Within days, legislation had been passed forbidding the sale or transfer of ownership of Ukraine's trunk gas pipeline to another country. An investigation was also launched to determine just who may have been responsible for making such proposals.

Vitaliy Hayduk, chairman of Ukraine's National Security and Defense Council, soon provided some insight.

Hayduk told a February 16 press conference that, after a meeting of the Yushchenko-Putin Commission in December, it was in fact an unidentified aide of Putin's who had delivered a memorandum containing such proposals. "Given its content," Hayduk said, "such a memorandum was deemed unacceptable and could not be signed."
Yanukovych was caught off guard by the Ukrainian parliament's reaction to Putin's comments.

Hayduk's claims were supported the next day by the deputy head of Ukrainian President Viktor Yushchenko's administration, Oleksandr Chaliy. On February 17, Chaliy revealed that Putin had proposed the idea of an asset swap -- Ukraine's pipeline in exchange for Russia granting Ukraine the right to drill for gas on Russian soil -- during a January 10 phone conversation with Yushchenko.

However, Chaliy said, the Ukrainian president had rejected the idea. "No proposals to exchange assets" ever came from Yushchenko, Chaliy insisted.

Public suspicion then turned to Prime Minister Viktor Yanukovych and Fuel and Energy Minister Yuriy Boyko.

Looking For Answers

Yanukovych at first appeared be caught off guard by the Ukrainian parliament's harsh reaction to Putin's comments -- even within the ranks of his own Party of Regions. In the immediate aftermath, Yanukovych made a number of contradictory statements on the issue while trying to blame the scandal on members of Yushchenko's administration.

Did the gas proposals originate in Russia or Ukraine?

But Hayduk's and Chaliy's testimonies that Russia's proposals had been rebuffed by Yushchenko's administration served to embarrass Yanukovych's government, which turned to Boyko to arrange a campaign to save face.

As Hayduk made his revelations, Boyko met with Gazprom CEO Aleksei Miller to discuss "the development of strategic cooperation between Russia and Ukraine in the oil and gas sector."

No details were provided of what the two men spoke about.

However, Interfax reported that the day before the meeting Boyko had said Ukraine should be given access to Russian gas reserves since UkrHazEnergo -- a partly Russian joint venture between the Swiss-registered gas trader RosUkrEnergo and Ukraine's Naftohaz Ukrayiny -- was already working in the Ukrainian market.

The flaw in Boyko's logic, though, is that UkrHazEnergo can hardly be considered a Russian company. Only one-quarter of the firm belongs to Gazprom -- the rest belongs to Ukraine's Naftohaz and two private Ukrainian businessmen.

Theories Abound

Interfax on February 15 also cited Boyko as saying he knew of an agreement Yanukovych had with the "leadership of the Russian Federation" under which Ukraine would be allowed to produce gas in Russia.

This revelation led to question about with whom in the "Russian leadership" Yanukovych had reached such an agreement. If it was Putin, could this be the origin of the Russian president's announcement in Munich?

One theory is that Yanukovych agreed to Putin's proposals under the condition that UkrHazEnergo -- whose role in Ukraine's energy sector is being debated -- be kept in tact.

Putin, as the theory goes, may have gone ahead and made the agreement public in the believe that it was a done deal.

If so, the strong resistance his words received in Ukraine must have been an embarrassment to the Russian leader -- both because he was caught jumping the gun on his dealings with Ukraine and because of the realization that he may not be as influential in dealings with Ukraine as he expected when Yanukovych became prime minister.

RFE/RL Belarus, Ukraine, And Moldova Report

RFE/RL Belarus, Ukraine, And Moldova Report

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