Street protests that have rocked the Ukraine took aim at the country’s energy sector. Antigovernment protesters tried to seize the former Soviet Republic’s main energy ministry building in central Kiev on Jan. 25, according to a Reuters report. Protesters had already seized the ministry of justice building. “There was an attempt to seize the building. About 100 people came, armed. I went to them and said that if they did not peacefully leave the building then the whole energy system of Ukraine could collapse," Energy Minister Eduard Stavytsky told the news agency. The protesters left, but blocked entry to the building. “What is taking place is a direct threat to the whole Ukrainian energy system.” The conflict essentially pits those wanting to maintain strong ties with Russia against those who want to bond with the European Union (EU). Ukraine President Viktor Yanukovych’s decision to pull out of talks for a partnership agreement and free-trade pact with the EU about two months ago – instead accepting US $15 billion in loans and a gas price discount from Russia later – sparked the street demonstrations that have turned deadly, according to media reports. Protesters clashed with police when the parliament passed anti-protest laws, a move that is now being undone in an attempt to quell the crisis. On Tuesday, Ukrainian Prime Minister Mykola Azarov resigned in another attempt to improve the situation just before parliament was set to meet for a special session. The crisis comes at a time when some energy companies are waiting for an agreement to be formalized by the Ukrainian government. The signing of a production-sharing agreement between the country and an ExxonMobil-led consortium, which will drill for gas in the Black Sea, has been postponed twice, according to a Reuters report. Stavytsky said the agreement will now be signed in February. ExxonMobil has a 40% interest in the consortium for the Skifska offshore block in the Black Sea. The company “intends to implement a workforce development plan and work with key Ukrainian stakeholders to identify and fund strategic social investment programs to assist in the development of local capabilities and improve the socioeconomic environment in local communities,” according to a statement on its website. Ukraine’s shale gas potential is also attracting companies. Shell is exploring in an area that is estimated to hold about 113 Bcm (4 Tcf) of shale gas reserves. Hopefully, the protesters and the Ukrainian government will clearly see the benefits of tapping its own energy resources and work to avoid derailing progress or stalling efforts made so far. By continuing to rely on Russia to meet its energy needs, Ukraine dampens development of its own resources. Maybe that is a goal of Russia, which has had no problem in the past turning off the taps that fuel Ukraine. It would be a cold winter indeed if these protests led to a disruption in energy supplies. Contact the author, Velda Addison, at vaddison@hartenergy.com.
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