There are exactly five things Kiev must do to become energy independent and disentangle itself from the Russian-driven geopolitical gas war:
1. Sell its pipeline system (most importantly);
2. Sell the remaining state interest in oil and gas company Ukrnafta;
3. Aggressively farm out as brown-field developments areas licensed by state-owned Ukrgazproduction;
4. Develop additional import resources, either through Europe or liquefied natural gas (LNG) through the Black Sea;
5. Provide security in pricing and contracts.
Before we embark on the specifics of this roadmap, it’s important to look at exactly how we got where we are today.
Call it what you want — unrest, separatism, foreign invasion — but the fact is there are troops running around eastern Ukraine killing people. The current situation is dire from any standpoint; economically, it is disastrous, triggering high taxes and steadily increasing inflation.
In addition, Ukraine and Russia are once again fighting over gas supplies and the transport of Russian gas to Europe.
The primary reason we’re here, of course, is economics. We’re all familiar with the events of the Maidan protests, what led to this and what has happened since. However, one could argue — as I have chosen to do during the Fifth Annual Ukrainian Energy Forum that kicked off in Kiev June 24 — that the failure to secure and develop independent energy resources within Ukraine has allowed Russia to conduct geoeconomic warfare which has escalated to low-intensity conflict in eastern Ukraine.