Gas conflict harmed Russia, Ukraine’s reputation: experts

Azerbaijan, Baku, Jan. 22/ Trend , A. Badalova/ Experts say Russia and Ukraine lost the gas conflict to the same extent and harmed their reputation.

"Both Russia and Ukraine have lost credibility vis-à-vis European Union, which is the largest and most important market for Russian natural gas," Carlo Stagnaro, director of energy department at Bruno Leoni Institute of Italy, said to Trend by -email.

The gas conflict between Moscow and Kiev began due to lack of gas contact for 2009 which led to full suspension of Russian gas supply to Europe via Ukraine. On Jan. 7, Gazprom suspended gas supply claiming that Ukraine siphons off transit gas. Russian resumed gas export to Ukraine on Jan. 20. Ukraine will buy gas at 20 percent discount in 2009. The gas will cost $360 for 1,000 cubic meters in Q1 2009 (Central Asian price is $450).

Stagnaro said Russia and Ukraine turned a "private" conflict into an international problem and created several reasons of concern in Europe. Now addressing recession is the top priority in Europe as well as elsewhere, but as the EU will grow again. The issue of energy security - that is, or reducing dependence on Russian gas and on transit countries such as Ukraine - will emerge as a key issue, as it was in the past, he said.

Chairman of Penta, center for applied political research of Ukraine Vladimir Fesenko also believes that both Ukraine and Russia lost gas conflict. It got out of bilateral framework.

The conflict hit Europe to a great degree and harmed Russia's gas exporter reputation, Fesenko said.

"Europe, who feared Russia in wake of the Russia-Georgia war, will fear it more from now on. Moscow is more criticized now. Europe seeks ways to reduce it gas dependence from Russia," Fesenko said.

Ukraine lost as it was blamed for the conflict. European Commission chairman José Manuel Barroso also placed responsibility both on Kiev and Moscow, expert said.

"It is especially painful for Ukraine as unlike Russia, it strives for Europe and wants to become EU member in future," Fesenko said. "After the recent conflict, Old World will be more skeptic of idea of Ukraine's euro-integration."

But some experts argue its not both sides that lost the conflict.

Head of Ukrainian Barometer sociological service Viktor Nebozhenko says Ukraine won the gas conflict.

He said Kiev achieved refusal from gas mediators and suitable price for Ukraine. "The most important step is that the agreement was signed between Ukraine and Russia in public.  Moscow did not lose face also," Nebozhenko said.

Europe won in terms foreign policy, he said. "It now has access to gas mains and gas holders in Ukraine and Russia with help of observers and high rank commissions," Nebozhenko told Trend . "The U.S. also won and proved that Russia employs its resources as a key weapon."

Expert says such conflict can erupt in future as well. "Such conflict can appear in the coming years until disagreements over prices are not solved," Stagnaro said.

He said The more Moscow and Kiev will engage in these kind of conflicts, the more Europe will try to find a way out, which might be more investments on LNG, alternative pipelines (such as the Nabucco) and renewables.

Fesenko said despite long-term agreements and coordination of a number of disputable issues, there are still risks that can serve as reason for new conflicts. These risks can be disagreements in coordination of price and volumes of gas, Ukraine's delay in payment for consumed gas and current financial situation of Naftagaz Ukraine and Ukrainian government.

"There is risk that the gas issue can be used in the presidential election campaign in the second half of the year," Fesenko said.

Nebozhenko said the recent conflict is a first resource conflict of its type in 21st century which will be followed by grain and water conflict.

Conflict between Ukraine and Russia is only first signs, Nebozhenko said.

Z. Novsvitski (Kiev) also contributed to this article.  

Have any feedback? Contact our journalist at: [email protected]

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