Ukrainian conventional resources - fuelling independence?

Transcription

1 Ukrainian conventional resources - fuelling independence? US-Ukraine Energy Dialogue IV: Aiming for an Energy Self Sufficient Ukraine by 2030 American Chamber of Commerce in Ukraine, Kyiv, December 11th, 2012 Jonas Grätz, Center for Security Studies, ETH Zurich

2 Natural gas reserves, tcm Source: BP Statistical Review, IEA

3 Natural gas production, bcm Source: BP Statistical Review

4 R/P rate, years Source: BP Statistical Review

5 Natural gas imports Source: EIA

6 Oil production, million tons Source: BP Statistical Review, Naftogaz

7 Oil R/P ratio, years Source: BP Statistical Review, CIA

8 Net oil imports Source: EIA

9 Coal R/P ratio Source: BP Statistical Review

10 Uranium reserves Reserves are estimated to be sufficient for 100 years of consumption But dependent on Russia for enrichment and fuel rod assembly Russia promised to build nuclear fuel factory in Ukraine as a joint venture between TVEL and Nuclear Fuel company Groundbreaking ceremony took place in October 2012 Ukraine and Russia quarreling over Ukrainian contribution to corporate capital

11 The bottom line Yes, Ukraine has substantial reserves (even conventional), especially gas, coal, and nuclear But the question is, whether Ukraine has enough time to realise its potential after waiting for 20 years Russia hopes that time will not be enough Exports are highly dependent on Russia and world economy Current account balance is worsening Budget deficit growing IMF assistance?

12 Imports Source: UN Comtrade

13 Billions Exports not else specified Misc. Manufactured items Machinery & Transport equip. Manufactured products class. by material Chemicals Oil, animal and veg. Fuels Crude materials exc. Fuels Beverages Food Source: UN Comtrade

14 Export destinations 100% 90% 80% 70% 60% 50% rest russia 40% 30% 20% 10% 0%

15 Fiscal and current account balances Source: EBRD

16 Balance of payment remains weak Source: IMF

17 Naftogaz (Gazprom) still burns a hole in the budget Projection Source: IMF

18 Public and total debt rises (in absolute terms) Source: IMF

19 Some words on South Stream our common victory

20 South Stream: rationale For Russia: Political: circumventing Ukraine as transit state and gaining influence in the (non-eu) Balkans Strategic: deterring Nabucco or other competitor project avoiding diversification Market design: Pushing back EU s marketization agenda Regime stabilization: nice contracts for regime-connected construction firms, steel producers and pipe-rolling mills (huge investments in Russia needed, about US-$ 30 bn) For transit / consumer states Security: threats from Gazprom will subside when cooperating Economic: Lower gas price for Russian gas, boost of economic activity in times of crisis, future transit revenues Political: Better political relationship with Russia better market access 21

21 Ukraine: The economic push and pull of the South Stream project Economic push Additional shortfall of transit revenues of about 1 bn US-$ per year Worsening bargaining position vis-à-vis Russia Economic pull So far no contracts for Ukrainian steelmakers visible, but this may change in case Ukraine does what Russia wants like in 2010 after the Sevastopol deal ( t of steel pipe annually)

22 Conclusions Ukraine has a great potential even in conventional resources However, chances were not taken up for quite some time The sorry state of the economy and of public finances demands a much improved governance More foreign capital needs to be brought in quickly Diversify economy and trade partners Energy independence strategy should be thoroughly followed IMF programme, as well as World Bank and EC budget support should be unfrozen if necessary to provide life support Raise internal gas prices somewhat, especially for big domestic consumers (concession to IMF)

23 Thank you for your attention!