Ukraine: Cyprus ripples not negligible.
News headlines about a Cyprus-crisis contagion have so far focused largely on Slovenia, Malta, Italy and Spain.

But Ukraine could also take a hit. While Ukrainian businesses are said to have possibly just $1-3bn in Cyprus – much less than the $30bn that has been estimated for Russia – if this money gets confiscated by the bailout levy or tied up by financial transaction limitations, it could be enough to tip the country’s troubled economy deeper into crisis.

As London-based Capital Economics points out in a report this week, the Cyprus bailout deal “may pose much bigger risks for Ukraine, which is already on the brink of a balance of payments crisis.”

Russian and Ukrainian businesses, it said, “appear to be using Cyprus for their financial transactions to pay for imports and to receive payments for exports for tax optimisation reasons. When the money comes back to Russia/Ukraine, it shows up as FDI inflows on the capital account, rather than as export earnings on the current account.”

This would explain why “tiny Cyprus” is Ukraine’s main source of investment, accounting for some 30 per cent of FDI.

U.S. company Chevron signed a shale gas exploration PSA to drill in Western Ukraine but the nationalist Svoboda (Freedom) Party which is in power in the region has led opposition to fracking, the term used for shale gas production, on allegedly environmental grounds.

It is indeed ironic that the anti-Russian Svoboda is opposed to energy diversification that will assist Ukraine in becoming independent of Russia.

The second policy is to construct a liquefied natural gas terminal that would satisfy immediate demand by importing gas 20 percent cheaper than currently. Vladyslav Kaskiv, head of the State Agency for Investment and National Projects, who was a parliamentary deputy from Yushchenko’s Our Ukraine, has led the project.

Ukraine launched the LNG project on the Black Sea near Odessa in November, beginning construction of a $145 million, 40-mile link from the terminal to the national gas network.

Unfortunately pressure to quickly secure a deal led to imposter Jordi Sarda Bonvehi signing on behalf of Spanish company Gas Natural. The company announced it had no intention to invest in Ukraine’s LNG terminal and the search continues for LNG partners. But, it also remains unclear if Ukraine can convince Turkey to permit the passage of large quantities of LNG through the Istanbul Strait.

A third policy is to increase oil production on the Black Sea coast. The Vanco contract will explore the 5,000-square-mile Prykerchenska region of Ukraine’s Black Sea shelf that reportedly holds large reserves of oil and gas.

Chairman Mikhail Afendikov, who was born in Donetsk, says Cub Energy brings together Albertan and Texan expertise and Western technology. Currently, it has nine gas wells in Transcarpathia and the Dnipro-Donets basin with up to 10 new wells planned this year in the 70,000 gross acres of underdeveloped land purchased this month lying adjacent to existing wells. The purchase of contagious land close to producing gas wells mitigates exploration risks enabling Cub Energy to draw upon existing infrastructure and in place Western technology.

Afendikov has high praise for Ukraine’s conditions for foreign investors saying Cub Energy has not experienced problems from local authorities while receiving encouragement from the central government. This is in contrast to earlier experience by Robert Bensh, who is a senior adviser to Cub Energy and Afendikov’s partner on day-to-day operations, with the Yushchenko administration. In 2008, after failing to resolve conflicts with oil and banking oligarch Igor Kolomoysky, who was then allied to Yushchenko, Bensh decided to close Cardinal Resources in Ukraine.

It is no coincidence that Ukraine’s energy independence is being spearheaded by Cub Energy, a city at the center of the large and active Ukrainian diaspora. It is also no coincidence that the majority of the Western companies that have won tenders in Ukraine’s energy sector are North Americans. The Yanukovych administration says that if Ukraine’s geopolitical importance grows in Washington’s eyes it will be given greater flexibility to pursue domestic policies and will be treated in the same manner as Russia.

Whatever the enigma, on-going steps toward Ukraine’s energy independence from Russia and the country again becoming a major European energy player are now on the cards for the first time since 1991. Cub Energy is one of the Western companies assisting in this strategic development.

One hundred years ago, at the beginning of the history of the National Art Museum of Ukraine, which was first called the City Museum of Antiques and Art, there was hardly any concept of Ukrainian professional art. Ukraine was always famous for its national ethnographical applied art. The founders of the museum’s collections decided to prove that this opinion was wrong and defined the list of main representatives of Ukrainian fine art. These scientists have included in the list not only those who were born and worked in Ukraine, but also those national-conscious artists who lived abroad. They thought that foreigners who worked in Ukraine have enriched a national culture too. These principles were the basis of their collective work. So works of T. Shevchenko, I. Repin, V. Borovikovskiy, V. Tropinin, N. Pimonenko, M. Vrubel, N. Ge, G. Narbut, A. Murashko and V. Krichevskiy became a part of the museum’s collection. The collectors have found even some older works ranging from medieval icons to Cossacks times portraits of military and church leaders and humorous comic pictures “Cossack Mamay”. Things came to collection from different areas ranging from far western Galitsia to eastern Tchernigovshina areas. They looked for masterpieces of Ukrainian art in Moscow and Saint Petersburg and even wrote correspondence to Ukrainian artists living in Europe and America. Though this activity was stopped during the Stalin’s repressions, and a big part of collection was dispersed or hidden, the tradition is still alive. Today there are a lot of new works of art coming to museum’s collections. Among these new comings are: unique icon relief “St. George in His Lifetime” dating to the 12th century; works of the founder of international abstractionism Kazimir Malevitch, who was native Ukrainian; masterpiece of Ukrainian rococo “The Great Martyr” icon, graphics of world famous Ukrainian living in the USA, Y. Gnizdovskiy. Now there are thousands of exhibits presented in the museum’s collection.

The 1990s, the first decade of Ukrainian independence, were the time when museum came to an international level. For the first time in the museum’s history its collections were exhibited in famous museums of Canada, France, Denmark, Croatia. The world discovered an advanced culture of the country with 10,000 years of history. As a result, some previously infamous artists became a part of international art elite. For example, A. Petritskiy is considered to be one of the best set designers of the 20th century, V. Yermilov is known as the most laconic constructivist of the 20s, and O. Bogomazov is ranked as one of the best futurists of Europe. Those exhibitions also have discovered the Ukrainian side of some famous Russian artists as O. Exter, A. Arkhipenko, D. Burluk. The items from museum’s collections often become the sensations on international exhibitions. In 1997 on “The Fame of Byzantium” exhibition the 12th century icon “St. Geroge in His Lifetime” gained the steadfast attention of the specialists. The National Art Museum of Ukraine is of course not the oldest in the list of most famous museums of the world. But its prestige is constantly becoming higher. And the belief of museum founders that Ukrainian culture is valuable on international level today has spread around the world.