KYIV — Paris. 2019. Yuriy Vitrenko — now CEO of Naftogaz, Ukraine’s largest oil and gas company — came face-to-face with the man who is keeping much of the world guessing in a dramatic, high-stakes game of geopolitical chess.
“He is, I would say, a bully,” Vitrenko said, describing Russian President Vladimir Putin. “Alpha.”
Vitrenko, speaking from an ultra-modern corporate meeting room with a panoramic view of the Ukrainian capital, said he was trying to collect billions of dollars from Gazprom, Russia’s state-owned gas company. He eventually got paid.
The energy relationship between the two countries is deeply embedded and lucrative. Some might even find it surprising: business with the enemy. Every year, Russia pays Ukraine’s US$2 billion in so-called “transit fees” for the ability to transport its product through Ukrainian pipelines. Ukraine doesn’t use that oil and gas. But much of the rest of Europe does. The European Union gets about a third of its natural gas from Russia. And about a third of that passes through Ukraine.
Amid the intensifying standoff between Rusxjmtzywsia and Ukraine, there is growing fear Putin could turn off the taps, and choke off supply to Europe, which has been standing by Ukraine diplomatically and militarily through NATO, as Russia reinforces its border with more than a 100,000 troops.
If Russia uses gas as a “weapon,” Vitrenko admits, “it will send gas prices and oil prices even higher.” In the winter — when millions rely in natural gas to heat their homes — the impact could be devastating.
Plus there’s the economic hit. “We are by far the largest taxpayer and one of the economic kind of pillars,” Vitrenko says, adding that Naftogaz pays as much in taxes as Ukraine spends on its military.
Whether Putin triggers an energy war with one of his largest continental customers is anyone’s guess, which gives him leverage. But the fact that the U.S. is already co-ordinating with its energy partners in North Africa and the Middle East to bolster European supplies shows there are real worries.
NATO Secretary General Jens Stoltenberg says the standoff “demonstrates the vulnerability of being too dependent on one supply of natural gas.”
For Ukraine, another worry is Nord Stream 2. Gas hasn’t started flowing through the $14-billion pipeline from Russia to Germany, but Ukraine sees it as a potential security threat if and when it does – because it entirely bypasses Ukraine, potentially making the country less relevant in the eyes of Europe, according to Vitrenko, and potentially less necessary to defend.
“When … Russian gas flows to Europe through Ukraine, we understand that we are to an extent … in the same boat with Europe, and they will immediately feel the effect of a full … war.”
As for the Canadian contribution so far, which includes a three-year-extension to Operation UNIFIER, Vitrenko says he is grateful, but also wants Ottawa to commit to sending lethal weapons. Canadian Defence Minister Anita Anand says that option is “on the table,” but hasn’t made firm commitments, nor has she signalled what criteria Canada will use to make that determination.
Describing a Canadian show he used to watch “with horse police” — Due South — Vitrenko says “Canadians are portrayed as very peaceful and not aggressive.”
“But at the same time Canadians, against your nature, implies that you have to be strong and sometimes even tough.”
Like Russia’s next move, Vitrenko also wonders what Canada’s will be.
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CTV National News’ Omar Sachedina, right, speaks to Naftogaz CEO Yuriy Vitrenko.
