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Teetering on the Edge

1193839483.250x200 ukraine russia gas deal.jpgA new poll indicates that over half of Ukrainians approve of a gas deal struck with Russia last month, ending the two-week crisis that cut gas supplies in much of Europe.

But the lasting consequences of the crisis are still hard to judge, especially with recent news that the Ukrainian economy is teetering on the edge of financial catastrophe. How will Russia react if Ukraine’s economy collapses completely, making just about any payment to Gazprom difficult? And how will Europe, precariously positioned in this burgeoning energy quagmire, respond to the possibility of a second shutdown? More transportation routes are clearly needed to hedge against the threat of Gazprom’s monopilization of Central Asian energy routes, while Europe needs to amp up energy investing and security policies.

Today, McClatchy breaks down the tangled web of politics and shady finances surrounding the transportation of Russian gas through Ukraine, focusing on the mysterious Ukrainian firm, Rosukrenergo, which Putin cut out of the recent deal.

“Little is known about Rosukrenergo, half-owned by the Russian state gas monopoly Gazprom, which has close ties with the Kremlin. A Ukrainian businessman, Dmitry Firtash, owns 45 percent; his name has been associated with a reputed mafia boss who’s wanted by the FBI on fraud charges, but he denies any business dealings between them.

“Thedetails are further clouded by Ukraine’s political infighting. Russianauthorities also consistently refuse to discuss the country’s financialdealings, which have included accusations that officials in Moscow alsoprofited from Rosukrenergo.

“One thing is certain: The descriptionthat Firtash offered can be discounted. ‘Rosukrenergo is a normalcompany, just like any other,’ he recently told Ukrainian television.

“Who is Firtash, and where does Rosukrenergo’s money really go?

“Ukrainianofficials who ought to know can’t say. ‘This is a shadow kind ofcompany that we still officially have not got any information on. Whois their shareholder? Who is their beneficiary?’ said Ukraine’s deputyjustice minister, Evhen Kornichuk, a member of Tymoshenko’sparty. ‘That might be Firtash; who else?'”