Ukrainian Prime Minister Yulia Tymoshenko has - once again - delivered a maestro performance in energy politics, deftly playing on fears of a pan-European natural gas crisis to leave her Russian opponents flatfooted, and her domestic rivals waiting to see what shot she will call next.
The latest tour de force of Ukraine's top female politician was emerging on Wednesday against no less a foil than Gazprom, Russia's largest corporation and the single largest owner of natural gas reserves on Earth.
Gazprom executives had been playing hard ball for weeks, warning they intended a total shut off of natural gas supplies to millions of Ukrainians, in the height of winter, since Ukrainians and particularly Tymoshenko's government weren't paying their bills.
Yet as the seconds ticked down to the end of 2008 it was Gazprom media spin experts that were scrambling to respond to Tymoshenko's latest moves, each dextrously timed to place the onus of a possible Russo-Ukrainian gas war - and the downstream damage it would cause in European energy markets - on Russia.
For weeks, it had seemed that Gazprom chairman Aleksei Miller held all the cards. Ukraine owed Gazprom between one and two billion dollars and, since the Ukrainians had been deadbeats for months, Miller had solid grounds to justify cutting off the Ukrainians the first moment it was legally possible, on the first day of 2009.
Ukraine's President Viktor Yushchenko, one of Tymoshenko's top opponents in Ukraine's turbulent domestic political arena, for months attempted to prevent a showdown with the Russians by pushing the Tymoshenko government to cut a new gas deal with the increasingly impatient Kremlin.
But gas negotiations dragged on into late December, with Tymoshenko blithely ignoring instructions from Yushchenko to cut a deal with the Russians or else. Yushchenko even went on television and accused Tymoshenko of "trying to make the domestic situation worse ... to further her own political ends."
"I only have the interests of the Motherland ... at heart," was Tymoshenko's deadpan response. It was only two days before the end of 2008, on a Tuesday, that the Tymoshenko government announced, with no fanfare and a rare near- total absence of early leaks to the press, that Ukraine had sent Gazprom 1.5 billion dollars, all or almost all of the outstanding debt, depending on whether the Ukrainians or Russians were doing the accounting.
Gazprom spokesmen dismissed the transfer, saying that Gazprom was aware Kiev had sent the money but also (somewhat unaccountably) that Gazprom had little idea when the cash might arrive in Moscow, as it was moving through the account of a Swiss middleman company half- owned by Gazprom.
But even as Gazprom spin specialists were arguing there still might be a European gas crisis caused by Ukraine, Tymoshenko dropped her next bomb, launching a formal letter to Gazprom warning that were Gazprom to cut Ukraine off even after Ukraine paid its debts in full, then Ukraine "could not guarantee full delivery of Gazprom product to European consumers."
Ukraine had amassed gas "sufficient for months of operation for the whole country" in underground reservoirs, and was quite capable of living for some time through a Russian gas blockade, Tymoshenko pointed out, almost coyly, to a UT-1 television reporter.
Roughly two-thirds of Ukraine's gas needs come from Russian supplies, but with strong hydroelectric, coal, and nuclear power capacity Ukraine could likely weather a Russian gas embargo for months, energy market analysts said.
Tymoshenko in typical style for her tactics nonetheless left her real threats unspoken: that though most of the gas in Ukraine's underground reservoirs was Gazprom property, her government was quite ready to siphon it for Ukrainian schools and businesses, and that any Gazprom decision to cut off gas to Ukraine would strike Gazprom right on the bottom line by cutting into a critically-needed income stream from European gas sales, Gazprom's single largest earner.
The situation, as the last day of 2008 drew to a close, was rich with irony. The energy-poor Tymoshenko government was, arguably, holding mighty Gazprom hostage, essentially daring the Moscow firm to bet its corporate bottom line, at a time of international economic contraction, against Ukrainian willingness to steal Russian gas bound for Europe and moving through Ukrainian pipelines.
By afternoon on December 31, a time when Russian and Ukrainian families alike are preparing for the gifts and celebrations of the New Year's holiday, the gas negotiators were inching closer to an agreement, with Gazprom revising its midnight shut off deadline to mid-morning January 1, the first day of 2009.
Tymoshenko spent the day in talks with her energy advisors, and top Gazprom officials. If and when a deal were to be reached, Tymoshenko - not Yushchenko - would be the Ukrainian official fly to Moscow to sign a new gas contract in Kiev's name, the Interfax news agency reported.
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