Ukraine Tie-Up With Gazprom Impossible: President

KIEV, Ukraine -- Ukranian President Viktor Yanukovych said Friday that a merger between his country's gas group Naftogaz and energy giant Gazprom, as proposed by Russian Premier Vladimir Putin, was impossible.

Ukrainian President Viktor Yanukovych

"It is impossible," Yanukovych said of the proposal in an interview with the BBC of the idea raised in late April, surprising Kiev.

Gazprom, the world's largest gas firm, dwarfs Naftogaz in size and capacity and analysts say a merger would mean the Russian firm essentially gobbling up the Ukrainian company.

"If it was on a 50-50 basis, it could be interesting," Yanukovych told the BBC, quickly adding that this would surely not be serious.

"We understand that it would be impossible to do such a deal on a 50-50 basis because Gazprom would never accept it, Russia would never accept it," he said.

"It's a joke and a tie-up under any other conditions would also be impossible," he added.

Earlier this month, Ukrainian Prime Minister Mykola Azarov said the proposal "merits attention" but insisted that it should be done on an equal basis.

Russia is rushing to cement ties with its neighbor after the pro-Kremlin Yanukovych came to power earlier this year, with gas supplies a major bone of contention.

Last month, the two countries signed a deal for Ukraine to receive a 30 percent discount on Russian natural gas imports estimated to be worth 40 billion dollars over 10 years in return for Kiev extending a lease on strategic port facilities in the Crimea for Russia's Black Sea fleet.

Source: AFP