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Ukrainian PM blocks European energy deal

July 18, 2008 at 4:07 PM

KIEV , Ukraine, July 18 (UPI) -- Ukrainian Prime Minister Yulia Tymoshenko barred a state-owned firm from signing onto a deal to ship oil to the European Union, delaying a long-planned measure.

Tymoshenko signed an order banning a state company from signing onto deals hours before Ukrainian oil refineries Naftokhimik Prykaropattia and Halychyna and the state-owned oil shipper UkrTransNafta were scheduled to sign onto deals to move the region away from Russian energy dependency, The Ukrainian Journal reported.

"These actions have signs of a state crime," said Bohdan Sokolovskiy, an energy adviser to Ukrainian President Viktor Yushchenko. "This development postpones the realization of the (Caspian oil supply) project by at least several months."

Yushchenko has lobbied for the project with U.S. backing as a way to diversify European energy markets.

Sokolovskiy said the deal would have brought 21 million barrels of crude oil to European markets annually.

Russia had worked to thwart any measures to diversify European markets and actively courted former Ukrainian President Leonid Kuchma to move closer to Moscow in energy relations.

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