Oil stirs conflict on Black Sea

While the European U-nion frets over Russian efforts to impose its energy diktat by building gas and oil pipelines on the bottom of the Black Sea, new conflicts are emerging – not over transit routes, but over rich hydrocarbon resources beneath its ancient waters.

An ongoing conflict between Ukraine and Vanco Energy Company is one example in which resource nationalism and a large dose of alleged corruption has combined to push out a legitimate

American company from developing Prykerchynsky, a large underwater gas field in the Black Sea.
Assignments to develop the field were given by former prime minister Viktor Yanukovych’s government during its final days in 2007 to Rinat Akhmetov, the major financial supporter of Yanukovich’s Party of the Regions. Vanco was caught up in a scandal when the new government led by Yulia Tymoshenko decided to unilaterally withdraw the licenses and break the contract with Vanco. Tymoshenko’s main argument was that corruption during the assignment and the licensing process had nullified the deal.

No one is currently developing the Prykerchynsky field, and the loser appears to be Ukraine. However, Vanco’s fate was soon to be experienced by another Western company, this time from Canada – the difference being that the nemesis of the Canadians was the Romanian government.

In 2004, Romania brought a case against Ukraine to the International Court of Justice (ICJ) in a dispute concerning the maritime borders between the two states – more specifically about Snake Island, a tiny rock in the Black Sea. The real issue was not who owned Snake Island, but the 12-nautical-mile arc of its territorial sea, which contains significant oil and gas deposits. It has an estimated 70 billion cubic meters (bcm) of natural gas – enough to supply Romania’s entire gas needs for five years – and 12 million tons of oil, a massive amount of money rides on what signpost goes up over this bit of seabed, according to a report on www.businessneweurope.eu.

Asia Times