Shady deals on Ukraine?s natural gas business may forfeit the country?s claim for good governance aid from the U.S. Millennium Challenge Corporation as rights to negotiate for all of Ukraine’s natural gas imports from Russia and Turkmenistan has been handed to Swiss-based company RosUkrEnergo raising questions about possible conflicts of interest or corruption. “RosUkrEnergo, the controversial Swiss-based gas trading company, is playing a growing and persistently opaque role in the Ukrainian gas sector,” according to a report issued in October by the International Energy Agency. “Its ownership structure is murky, and the company appears to make significant profit simply because it signs contracts to transit gas from Central Asia to Ukraine.” U.S. companies that have explored doing business with RosUkrEnergo have been frustrated by its lack of transparency while one consultant claimed that RosUkrEnergo has earned hundreds of millions of dollars for transactions that could easily have been handled by the state oil and gas company. Experts say that these anomalies should have kept the country from meeting the MCC standards for U.S. assistance however, Carlos Pascual, former U.S. ambassador to Ukraine and vice president of the Brookings Institution, said he supported the MCC decision on aid because of improvements in governance and progress in the fight against corruption saying that the energy sector is only a dark spot in the overall picture. Ukrainian Prime Minister Viktor Yanukovych said in a recent interview that he was grateful to be awarded aid status, and pledged to improve the ethical and administrative standards of his government.
Source: Closer to the West but closed to scrutiny (Washington Post)