Remember this post I wrote from a few days ago?
This reads rather well now and something of a prophesy:
“If Russia was to turn off the taps, the EU, which has done all it can to stay outside this contractual squabble would then be sucked in. The options for the EU would be to either back Ukraine and state the contract is flawed somehow, which would not do the perception of Ms Tymoshenko’s innocence much good, to side with Russia which does nothing for the EU’s geopolitical battle with Russia over Ukraine, or to get involved with a Ukrainian/Russian/EU troika over the GTS which is something the current Ukrainian authorities have been muting for since they came to power with little concrete response from the EU by way of encouraging momentum.”
The options I mentioned above are probably all to the dislike of the EU, however they seem to have taken a public decision on what they are prepared to do. As usual with the EU, things have to get to the point there the issue is almost critical for it to do anything, but that is the nature of the EU beast.
Only 24 hours after I spelled out the only realistic options for the EU, Gunther Oettinger, the EU Commissioner for Energy stated the European Commission was willing to participate in the Ukrainian gas transport system upgrade (as well as supporting other Ukrainian energy reforms).
Quite probably the least of all evils given the geopolitical consequences of the only other two realistic options.
It remains to be seen whether this will actually happen, but it certainly now allows Ukraine the possibility of keeping control (if not sole ownership) of its gas transport system with a troika of producer, transporter and end user all involved in the joint venture.
That seems far too sensible a solution both from the viewpoint of politics and cost. One has to assume therefore that there will be some reason why it doesn’t happen, however we can only hope that by some fluke it gets off the ground and becomes a reality.
Hopefully it will give the current authorities a brace for a backbone that must be close to breaking due to Russian pressure over the issue of the GTS. Particularly so as this was always the proclaimed hope by the current Ukrainian government who realise that Naftogaz Ukraine cannot continue as it is and must be broken down into component parts and privatised where ever possible.
A golden share or small majority stake in any troika for the Ukrainian State with regards to the GTS is all that is really required as far as Naftogaz is concerned. There seems to be no other part of the Naftogaz behemoth that should have any State input at all when it comes to energy related national security.
Given that Naftogaaz was further downgraded by S&P yesterday to CCC status, you have to expect that its break-up and sell off will soon follow after agreements over the GTS have been reached between interested governmental authorities. It is the only asset of the company worth keeping control over as a State for national strategic reasons.
Let’s see how this situation develops now the EU have eventually publicly engaged.