Russian, Ukraine both lose after gas dispute: Hungarian analysts

 

Hungarian experts said late Wednesday that the Ukraine-Russian natural gas dispute has no winners. In the long term both parties are losers as the European Union, their biggest customer, has now pledged to find alternative sources in an attempt to avoid any similar scenarios in the foreseeable future.

Hungarian Prime Minister Ferenc Gyurcsany, economy minsiter Janos Koka and Zsolt Hernadi, president of Hungary's dominant oil and gas company Mol, said that following their evaluation of the Ukrainian/Russian dispute Hungary would press the EU's new Austrian Presidency to intensify its work for a common EU energy policy.

"It is evident that Russia (Gazprom) wants control over the Ukrainian (Naftogaz) natural gas (and oil) pipeline." - Ferenc Gyurcsany, Hungarian Prime Minister

"Just because gas supplies are normalized Hungary can not sit back, but must instead diversify its energy resources and become independent from dominating energy imports from Russia," said Gyurcsany.

Zoltan Biro, historian and expert on Russian affairs said, "It is evident that Russia (Gazprom) wants control over the Ukrainian (Naftogaz) natural gas (and oil) pipeline." He added that the Ukrainian Government had been caught off guard by the Russian move to hike prices and later even cut much needed natural gas supplies after Russia had claimed that it wanted to also "introduce a market price" for natural gas sold to the Ukraine. Biro said that Russia had for years accused Ukraine of tapping the natural gas transit pipeline going to Central-Eastern and Western Europe.

Andras Deak, a security expert, said that Gazprom had carried out the move to re-evaluate the distribution of the natural gas exports to the west. "What we have seen now is merely a fore-play (of what Russia is able to do) as the dispute only effected about 25% of the Ukraine's natural gas consumption," he said.

Ukraine to be more dependent on russia as turkmen gas contract ends

Deak added that this year Ukraine's natural gas agreement with Turkmenistan, from where it gets about 50% of its gas, comes to an end, meaning Ukraine will have to buy this gas also from Gazprom, which has in turn secured the quota with Turkmenistan. "If the dispute erupts again it will do so with a bigger blast and with higher stakes," he said.

"Gazprom now has a bigger slice of the (natural gas transit-export) pie than it had earlier." He sais the deal was also "lucrative" for the Ukrainian political elite.

"Nevertheless in the three-day conflict, both Ukraine and Russia are losers on the long run because the EU are now seriously turning more attention towards researching and developing alternative energy sources as a security measure." Miklos Hegedus, Director of Energy Research Institute at economic think tank GKI in Hungary said, "The recent compromise shows that market rules can not be avoided and that (political) blackmail is never a solution."

Created on: Jan 3, 2006

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