Paid or Unpaid Public Relations?

The Ukrainian Chas (Time) press center must have never seen such a touching unanimity between an enterprise and the government body that controls it as was demonstrated last Friday on the occasion of the third anniversary of the Russian Tiumen Oil Company’s (TNK) presence on the Ukrainian market. Ukraine’s State Property Fund (SPF) Deputy Chairman Dmytro Parfenenko put on a breathtaking performance in the role of distinguished guest. The first thing he did was exalt to the skies, not just inform about, the brilliant achievements of the Russian oil men who had privatized the Ukrainian mammoth refinery, LiNOS. Mr. Parfenenko looks on this as “an example of successful privatization of an Ukrainian enterprise.” “All contractual obligations have been met,” he continued. Indeed, the Russians have every reason to rejoice: what was recently a sick enterprise is now working well, the chain of filling stations is about to be reach the coveted target of thousand, and the market share is approaching 27%. With due respect for TNK’s business achievements, we must still ask what a civil servant should and should not speak about a private company? What about the sense of proportion?

Now about the Odesa-Brody oil pipeline which TNK is quite successfully reaching for. Moreover, its elder sister, British Petroleum (BP), is also slated to do business in Ukraine. As we know, TNK suggests redirecting this so far fictional Ukrainian oil river and pumping Russian oil to the Black Sea port of Odesa, rather than Caspian oil to Europe. Ukraine is taking a strange position here, which in fact reflects the rivalry of major financial groupings, including those who lobby the interests of Russian capital. On the one hand, Ukraine has held three presentations of its oil transport brainchild (in Kyiv, Brussels, and Gdansk), trying to persuade the public that the Odesa-Brody line might well be extended as far as Plock and Gdansk or even the Northern German port of Wilhelmshaven. In Brussels, the EU supported this project and put in on its top-priority list. In Gdansk, the Poles took a much warmer attitude toward this, although they still asked a lot of questions. Yet, last Wednesday, the Ukrainian government took, not without a persistent promotional drive by TNK, a six-month timeout. It was decided, as this company had suggested before, to bid for an independent expert to assess the prospects of the pipeline pumping Russian oil to Odesa in the reverse mode. Fuel and Energy Minister Serhiy Yermilov, who had just returned from Poland, where he signed a protocol of intent on the Odesa-Brody-Gdansk route, reportedly looked “paler than death” after the Cabinet’s statement. Nevertheless, he noted that the reverse-mode operation needs a UAH 500 million in investments and explained that the government was inviting an expert to receive an independent assessment of this manner of operation, as was done for two years in the case of the projected way of utilizing the pipeline. It will be also appropriate to quote here President Leonid Kuchma as telling our government on this subject, “The Cabinet of Ministers must make a decision in accordance with Ukraine’s national interests.” This apparently means taking into thorough consideration all the economic and political circumstances, perhaps including the results of the fifth session of the joint Ukraine-Kazakhstan Commission on Economic Cooperation held last Thursday. “The parties are interested in the development and joint utilization of the Odesa-Brody oil pipeline and would like to see the Kazakh side as an investor in the construction of the Brody-Plock oil pipeline,” the minister quoted the commission’s final decision.

Meanwhile, asked by The Day if TNK’s Ukrainian daughter was ready to fund the reverse-mode operation, the company’s president, O. Horodetsky, evaded giving a straight answer, only repeating the well- known proposal that the pipeline be temporarily filled with anticorrosion oil. “I am simply pleased to note that Verkhovna Rada’s and TNK’s views on this project were heeded,” Mr. Horodetsky said.

Meanwhile, Ukrtransnafta experts are not exactly elated. In their opinion, the only reason why TNK needs the pipeline is not to carry its own oil but to prevent Caspian oil from taking a shortcut to Europe. They think TNK’s next step will be to demand a lease of this pipeline. Then what about our national interests?