Publication: Monitor Volume: 3 Issue: 228

Ukrainian president Leonid Kuchma on December 5 came out in support of turning part of the shares of Ukraine’s idle oil refineries over to Russian companies. "The Russians are promising that they would deliver enough crude oil to employ our refining capacities, if they are given part ownership in the process of privatizing the refineries," Kuchma argued. On November 25, Kuchma had similarly contended that "there will be crude oil [to process] and oil products, there will be wages and everything else" if Russian firms are given equity in Ukrainian refineries. The president argued that idle refineries would within one or two years turn into "piles of scrap metal," and may have to be sold at a far lower price than can still be obtained from Russia at present in return for part-ownership of the plants. Local observers were quick to comment that the idea is inconsistent with the Kuchma administration’s own goal to reduce Ukraine’s dependence on Russia for fuel. (Ukrainian and Western agencies, December 5, November 25)

Russian first deputy prime minister Anatoly Chubais and president Boris Yeltsin raised this and related issues in their meetings with Kuchma, held on November 14 in Kyiv and November 15-16 near Moscow. They called for turning some of Ukraine’s main oil, gas, and power-generating installations into joint companies through Russian capital investment. The idea is far from new and has encountered political resistance that spans most of the spectrum in the Ukrainian parliament. In one long-pending test case, the executive has been unable to carry out an earlier cabinet’s agreement to permit acquisition by Russian capital of 45 percent equity in the flagship Lisychansk oil refinery.

Terrorism Trial in Tbilisi.