Oil majors’ bids give Ukraine a boost
Five international energy groups have placed bids for the first multi-billion-dollar hydrocarbon exploration and production licences offered by Ukraine under a plan to reduce dependence on Russian fuel imports.
In a big confidence-boost for the country’s efforts to win more foreign investment, Kiev has secured bids from Chevron and ExxonMobil of the US, Italy’s Eni, Royal Dutch Shell, the Anglo-Dutch group, and TNK-BP, the British-Russian joint venture. Continue reading »
Ukraine: running short of funds
Ukrainian president Viktor Yanukovich is off to Moscow next week in his latest effort to secure economic support from his powerful neighbour, with a discount gas supply deal near the top of his list.
It’s a regular trip. But Kiev’s financial needs are pressing: S&P on Thursday downgraded the credit outlook on Ukraine to “negative” while ministers talked of rescheduling $3bn in debts owed to the International Monetary Fund under a 2008 programme, even as Ukraine’s current programme has been suspended. No wonder Yanukovich needs Russia. Continue reading »
Ukraine: the dangers of Putin 2.0
Ukrainian President Viktor Yanukovich’s administration is bracing itself for the return of Vladimir Putin as president. It’s hoping the powerful Russian leader won’t kick off a third term by flexing his political muscle against its increasingly isolated and vulnerable neighbour.
Putin may not be as strong at home as he was in prior years. He faces the challenge of opposition forces seeking change and reforms. But even his domestic political foes are likely to back his main foreign policy agenda: asserting Moscow’s regional influence. Continue reading »
Kiev’s big shale gas tender kicks off with a whiff of controversy
It’s ramping up to be the biggest government tender Ukraine has ever held and a potential game-changer for an economy struggling to break its dependency on increasingly expensive imports of Russian natural gas.
People in Ukraine’s government say companies such as Royal Dutch Shell, Russian-British TNK-BP, America’s ExxonMobil and Italy’s Eni are considering participating in tenders for production sharing agreements for shale gas and other unconventional deposits. Continue reading »
US to Ukraine: no reforms, no bailouts
It’s looking less and less likely that Ukraine, its fragile economy bracing for a eurozone-driven slowdown, will get a boost of confidence and cash any time soon from the International Monetary Fund.
A senior US official hinted during a recent visit to Kiev that fresh bailouts from the IMF, which froze a $15.6bn loan programme last year due to lacklustre reforms, will also require greater commitment to democracy. Continue reading »
Ukraine: on the brink again?
A eurozone recession this year appears pretty certain, but its possible impact on the volatile economy of Ukraine remains very unclear. A smallish swing in the west tends to trigger much larger shifts on the Dniepr river.
Still fresh in memory is the whopping 15 per cent GDP contraction experienced during the 2009 global recession. The country remains deeply vulnerable to global shocks – not least those triggered by the eurozone – due to its dependence of on commodity exports, starting with steel. Continue reading »
Ukraine: losing friends
Ukraine, ruled with an iron fist by president Viktor Yanukovich and his oligarch backers, seems to be getting on everyone’s bad side of late.
This month, the European Union threatened to put on hold free trade and associate agreements after Yulia Tymoshenko, the opposition leader, was sentenced to seven years in jail. The trial was widely seen as a politically-motivated attempt by Yanukovich to sideline her from politics. Continue reading »
Ukraine’s vanishing foreign reserves
As if investors in Ukraine don’t have enough to worry about – here’s another news bombshell. The country’s central reserves of foreign currency and gold has plunged by a whopping 8.3 per cent to $35bn in September.
The news – revealed on Tuesday by Valeriy Lytvytskiy, chief adviser to the National Bank of Ukraine’s governors, and reported by Bloomberg – stunned a market that is already spooked by the effects a double-dip downturn could have on Ukraine, one of the worst-hit economies during the 2009 global recession. Continue reading »
Ukraine: time to call the IMF?
With another global slowdown unraveling and memory still fresh of the nasty economic beating Ukraine felt during the 2009 recession, urgency is building up for Kiev’s government to unlock billions of dollars in fresh, low-interest rate loans by reviving talks with the International Monetary Fund.
“A rather serious crisis is on our doorstep… We don’t have options and we should find understanding [with the IMF], as it is difficult to stay eyeball to eyeball with the crisis and without support of international financial organizations,” Sergiy Tigipko, Ukraine’s deputy prime minister said in a recent television appearance. Continue reading »
Tymoshenko’s arrest, bad for Ukraine
Ukraine, a vast emerging market economy on the European Union’s eastern border, has been hit in recent days with a double whammy.
The nation’s small and relatively illiquid stock market plunged by more than 8 per cent on Monday, bringing the decline in the past week to a whopping 16 per cent. The trend, largely driven by global market factors such as S&P’s US downgrade and European debt fears, has been sharp and downwards in recent months.
Ukraine is also being shaken up politically. Continue reading »
Ukrainian oligarch takes to the sky
Igor Kolomoisky, a multi-billionaire with roots in Ukraine’s lucrative industry and energy sectors, took a major step towards forming a new European airline on Friday.
Shareholders of Climber Sterling, the financially troubled Danish airline, approved a share issue that will bring Kolomoisky in as a strategic investor with a majority stake. Continue reading »
Ukraine to Greece: just do it
Another lesson from eastern Europe on how to implement unpopular reform. Just do it – and blame the IMF and the markets.
Ukraine’s parliament, in a late-night session on Thursday-Friday, hiked the retirement age for women from 55 to 60 as part of pension reform legislation needed to unfreeze a $15bn International Monetary Fund loan program that has been frozen since March.
Ukraine, wary of Russia, seeks energy independence with $1.5bn gas plant
Ukraine on Wednesday made a serious move towards cutting its energy dependence on Russia by formally inviting potential investors to prepare studies on building the country’s first LNG (liquefied natural gas) plant.
Located on the Black Sea, it would be a gateway for gas from the Black Sea region and beyond. But, as with many projects in Ukraine, the path from announcement to completion may be long and complicated. Continue reading »
Ukrainian farming: untapped potential
Greg Page, the ceo of Cargill, the US agribusiness group, has become the latest expert to extol the vast potential of Ukrainian agriculture. Speaking to the FT, he said investment was the key.
So, why, 20 years after the country won independence from the Soviet Union, isn’t Ukraine doing more to realise this potential, double its harvests and grow rich from the exports? Continue reading »
Ukraine: an inch at a time
Ukraine has inched a bit closer to unlocking billions of dollars in fresh loans from the International Monetary Fund that are crucial to shore up investor confidence and patch stretched state finances.
All is set for President Viktor Yanukovich’s government next month to push through unpopular pension reforms after parliament last week gave the planned legislation a first reading. Without the reforms, the IMF won’t disburse more loans from last summer’s $15bn programme. Without the money, Kiev will struggle. Continue reading »
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