UKRAINE TO FORGE NEW ENERGY DEALS
By Khadija Ismayilova for Eurasianet
ISN, Switzerland
14/09/06
Pipeline politics in the Caspian basin makes for strange political
bedfellows.
Yushchenko made his first official visit on 7 – 8 September to
Azerbaijan. The trip produced seven bilateral cooperation agreements,
including a commitment to expand energy cooperation. Yushchenko said
his administration’s top priority was to forge deals concerning
"the extraction, refining and sale of oil," the Trend news agency
reported. In talks with Aliyev, he touted Ukraine’s Odessa-Brody
pipeline as a potentially new energy conduit linking Azerbaijan,
and possibly Kazakhstan, to Western European markets. The
Yushchenko-proposed route would bypass Russia, as does the already
existing Baku-Tbilisi-Ceyhan pipeline.
Following his discussions with Azerbaijani leaders, the Ukrainian
president acknowledged that Kiev and Baku were not a natural fit as
partners. "Our talks were easy-going, but there are problems in our
relations that we are ready to resolve," he said.
For much of the past two years, Ukraine and Azerbaijan have been at
political odds. Yushchenko, who led the Orange Revolution in Kiev
in late 2004, became the embodiment of the democratization movement
in the former Soviet Union. Aliyev, meanwhile, drew international
criticism in connection with the Azerbaijani government’s manipulation
of the 2003 presidential and 2005 parliamentary election. In short,
the two seemed to be polar opposites in terms of political practices.
After Yushchenko’s triumph in Ukraine, Azerbaijan was among the
authoritarian-minded former Soviet states that took action to prevent
the spread of what became known as the Orange Revolution phenomenon. In
September 2005, for example, authorities at Baku airport barred
an activist of the Ukrainian youth organization Pora, which served
as a catalyst for the Orange Revolution, from entering Azerbaijan,
prompting a protest from Kiev.
The "cold war" between Kiev and Baku reached a peak in October
of last year in a dispute over the fate of Rasul Guliyev, an
Azerbaijani opposition leader who is wanted in Baku on embezzlement
charges. Guliyev, who denies the allegations against him, was
attempting to return to Azerbaijan to take part in the country’s
parliamentary elections. Azerbaijani authorities barred his plane from
landing in Baku and he was diverted to a Ukrainian airfield. With an
international warrant against him, he was briefly detained in Ukraine,
but then released. The decision against keeping Guliyev in custody
caused displeasure in Baku, and Aliyev reportedly personally called
Yushchenko to complain.
Geopolitical circumstances in the Caspian Basin seem to have forced
the Azerbaijani and Ukrainian leaders to set aside their philosophical
differences. From Azerbaijan’s perspective, Ukrainian political support
can reinforce Baku’s stance toward a Nagorno-Karabakh settlement. In
a 7 September statement, Aliyev expressed thanks for "Ukrainian
understanding of Azerbaijan’s [Karabakh] position."
Addressing students of Baku Slavic University on 8 September,
Yushchenko placed Ukraine firmly on Azerbaijan’s side, saying that
"recognition of Azerbaijan’s territorial integrity is a necessary
condition for settlement of the [Karabakh] conflict."
Yushchenko’s Karabakh statement appears linked to Ukraine’s desire
for Azerbaijani support in the energy sphere. Kiev’s efforts to
reduce its energy dependence suffered a considerable blow in early
September, when Russia cut a deal with Turkmenistan on gas supplies,
thereby denying Ukraine significant access to Ashgabat’s abundant
energy reserves. The Russian-Turkmen deal will likely require that
Ukraine pay a significantly higher price for gas imports.
Russia also wields considerable influence over Ukraine’s oil
supplies. The Odessa-Brody pipeline was supposed to reduce that
dependence, but the oil route, which is capable of transporting 40
million tons of oil per year, remains underutilized. Yushchenko
sought an Azerbaijani commitment to ship a relatively modest
amount – about 4.5 million tons – via Odessa-Brody bound for Western
markets. Aliyev’s did not give a clear response, although he indicated
that diversification of Azerbaijan’s energy export routes is a basic
element of the country’s oil strategy. "We have already established
three pipelines to export our oil to world markets. However, as oil
exploration in Azerbaijan increases we consider new facilities for
export," Aliyev said.
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