Ukraine and Russia: The Role of a Middleman

Original: Ukraine and Russia: The Role of a Middleman

Russia has prickly relations with several of its neighbors, but all pale in comparison with its friction with Georgia and Ukraine. Last August, the former resulted in a full-fledged war, and pessimism about the security of the U.S.-backed oil and natural gas corridor connecting the Caspian Sea with the West. Now, the latter -- Russia's long antagonism with Ukraine -- is provoking a similar recalibration of energy security, this time about natural gas supplies to Europe.

I have pointed out the pricing he article notes the role of an opaque middleman company called RosUrkEnergo in the
deal. We have discussed RosUrkEnergo at O&G; The Wall Street Journal's Glenn Simpson has done the best ground-breaking work on the company. Half-owned by Gazprom and two Ukrainian businessmen, RosUrkEnergo is the equivalent of a maitre d' who performs no principal role but controls access to the best tables. RosUrkEnergo owns no gas, or pipelines, yet earns a flat 20% take off the top of all the gas sold by Russia to Ukraine.

RosUrkEnergo takes that gas, and sells it. That amounted to a