Snags Seen In Yanukovych/Medvedev Talks

KIEV, Ukraine -- Russia and Ukraine may have failed to narrow differences on key issues such as natural gas during a phone call between President Viktor Yanukovych and Russian counterpart Dmitry Medvedev.

Dmitry Medvedev (L) with Viktor Yanukovych.

A brief report posted by Medvedev’s press service late Wednesday said the parties discussed “separate issues” of Ukrainian-Russian cooperation and “bilateral contacts” in the near future.

The report did not mention any progress in the discussions.

Yanukovych’s press service never reported that the phone call had even taken place.

The call comes less than a week after Russian First Deputy Prime Minister Igor Shuvalov, at a meeting with Serhiy Liovochkin, Yanukovych’s chief of staff, in Kiev failed to agree on a timeframe for the next meeting between Medvedev and Yanukovych, citing “problematic issues” in bilateral trade.

The developments underscore cooling of relations between Kiev and Moscow over the past several months as has been reflected in the delayed meetings between the two presidents.

Medvedev and Yanukovych never met this year, highlighting the slow progress in trade talks.

This is a sharp contrast with the year of 2010 when Medvedev and Yanukovych have met 11 times in the course of 10 months between March 2010 and December 2010.

The two presidents are supposed to meet at the Ukrainian-Russian strategic committee, which has been tentatively scheduled to take place in the first half of the year.

Meanwhile, Russia and Ukraine made little progress in discussions over merger of Gazprom and Naftogaz Ukrayiny, Deputy Energy and Coal Industry Minister Volodymyr Makukha said Thursday.

“There are some contacts, this issue is being discussed periodically, but I wouldn’t dare to say there is some real progress,” Makukha told reporters. “Let’s say this issue is at the beginning stage.”

The comment shows that Kiev has been lukewarm to the idea of the merger.

The merger idea was first suggested by Russian Prime Minister Vladimir Putin in April 2010, and he had called on Ukraine to move fast on the issue.

But Ukrainian President Viktor Yanukovych immediately rejected the idea.

The merger of Gazprom and Naftogaz would technically amount to the acquisition of the Ukrainian national company by its Russian counterpart.

Naftogaz would have 6% stake in the merged company, industry analysts said.

Gazprom would receive total control over the merged company and would also control Ukraine’s natural gas pipelines that move up to 80% of Russia’s European natural gas exports.

On the other hand, Ukraine has been seeking to change a 10-year gas agreement with Russia in order to secure lower natural gas prices, but Russia has flatly refused.

Putin and his Ukrainian counterpart Mykola Azarov, at a meeting in Kiev in October 2010, failed to agree on lower natural gas prices and the creation of a gas joint venture.

The talks failed after Russia had insisted on getting majority control over the joint venture that would operate Ukrainian gas pipelines, according to a source in the Ukrainian government familiar with the situation.

Source: Ukrainian Journal