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Russian PM Putin Proposes Partnership Between Oil Companies

3. May 2010 by Administrator 0 Comments

"Shootin'"Putin Strikes a New Oil Deal

Russia’s Prime Minister stunned both citizens of his own country and Ukraine when he suggested that Russia’s largely government-controlled Gas Extraction Company Gazprom should merge with Ukraine’s Naftogaz Ukrainy, the state energy company responsible for the refinement of Natural Gas and Crude Oil.

The suggested deal has caused a massive uproar among Ukrainian politicians, who see the proposal, which would give Russia control of over 20% of Europe’s gas as Russia effectively buying back the control of Ukraine they lost during the fall of the Soviet Union. Former Prime Minister of Ukraine Yulia Tymoshenko has referred to it as “an ambitious plan of the liquidation of Ukraine."

Former Ukrainian President Viktor Yushchenko has noted that Naftogaz Ukrainy has consistently lost money since an agreement with Russia in 2009 and that a merger like the one proposed would be bad for both Ukraine and Europe. The 2009 agreement was superseded by a new pact made this week in the wake of new Ukrainian President Viktor Yanukovich extending Russia’s lease on a Black Sea naval base, the updated agreement is said to have slashed prices considerably. Aside from the proposed merger, both countries have pledged to modernize the pipeline that currently transports Russian gas and oil to Ukraine. Russia currently provides around 66% of Ukraine’s gas needs, additional supply being imported from Egypt and the United Arab Emirates.

Photo: Reuters