Notes on Ukraine’s elections

Here’s an update that I wrote a couple days ago. I have yet to settle into my own place in Kyiv, so the images may not be properly displayed, but I wanted to get this up. I leave for Luhansk later today to observe the elections.

Ukraine’s pre-term “emergency” parliamentary elections are less than a week away, and campaigning has correspondingly ramped up.  The three main parties—the Party of Regions (PoR), Our Ukraine – Self Defense (OU-SD), and Block of Yulia Tymoshenko (Byut)—have dominated the advertising sphere.  My own unscientific survey of political advertisements throughout Kyiv puts the PoR as the most prevalent, followed by the OU-SD, and then Byut, with the remaining few competing parties (Socialists, Communists, Lytvyn’s block, and Vitrenko’s Progressive Socialists) following, and a smattering of advertisements from parties not expecting to break the 3% barrier (i.e. Svoboda, Block of Kuchma, the Green Party).   

Each of the main parties has a distinct campaign message they are pushing through the use of highly visible “bigboards” (billboards), streetlight posters, and other roadway signage. 

The Party of Regions emphasizes its dominant campaign color, blue, with a bold white font expressing a short and simple message, accompanied by the party’s name and a map of Ukraine filled with the blue and yellow national flag.   

The party’s two main slogans are “Stability and wellbeing!” and “A happy people – a successful nation!”  More recently, posters with “Vote for no. 4!” have shown up, referring to the party’s place on the ballot.  I have yet to come across any PoR advertising with party headliner Prime Minister Viktor Yanukovich’s picture on it.   

         

The OU-SD party sticks with its orange theme, a carry over from the predominant color of the Yushchenko-aligned Our Ukraine.  The color has become incredibly symbolic following the winter 2004 “Orange Revolution” street protests that swept Yushchenko into Ukraine’s presidency.  The party’s main slogan for this parliamentary election is “One law for all!” and is usually accompanied by a shot of the president in a working, intellectual pose (there are three separate pictures of him adjusting his glasses, seemingly pondering a particular weighty issue).   

    

Other posters feature Yuri Lutsenko, the popular former interior minister and current head of the Self Defense part of the party.  His serious, bespectacled face stares straight ahead while the slogan proclaims, “For Ukraine – a new parliament!  For Kyiv – a new power!”  Another series of advertisements features a lineup of the party’s top five delegates, headed by the youthful Lutsenko, who is flanked by four personified technocrats.   

 
Byut’s advertisements similarly highlight the face of its headliner, the chiseled beauty Yulia Tymoshenko, who has retained her “peasant” halo-braid hairdo.  Her stare, while slightly off center, also penetrates into the viewer, with the party’s logo and slogan off to the side.  Her ads emphasize her plan of the country’s future progress entitled “Ukraine’s Emergence (Прорiв),” or something like that.   

The bloc’s logo is a distinctive checkmark stylized to resemble a painted heart.   

 
This corresponds to another of her main campaign slogans, “I love Yulia,” and is likely meant to provoke emotional appeal for both her and the promise of the country.  (Similarly, she originally deliberately decided on the name for her eponymous party so its shortening—Bloc Yulia Tymoshenko—would be pronounced “beauty.”) 
 

Television ads have also been prevalent, as TV remains one of the most effective ways to reach the Ukrainian public.  Unlike its print advertisements, the PoR TV spots do feature Yanukovich who makes a speech that harkens back to the good ol’ days of Ukraine while demonizing the instability that threatens the country.  There are also clips of “ordinary” Ukrainians who express their worries about the country, and how things used to be better for them. 

The TV ads for the OU-SD party feature both the president—with his distinctive speaking style—as well as Lutsenko and the other main candidates, generally giving a few sentences from picturesque spots across Kyiv, before ending with a resounding and firm “one law for all!” 

Yulia’s ads have her talking directly and emotionally to the viewer, as she shares her vision for a new and improved Ukraine.  Other spots for Byut feature more “ordinary” Ukrainians tackling populist issues like the rising cost of gasoline and meat.   

The Block of Kuchma’s ad is perhaps the silliest.  It depicts two children, one little girl dressed as Yulia and one boy dressed in blue with a miner’s hat (referencing Yanukovich’s background from the coal-dominated Donbas region) fighting over a map of Ukraine.  Volokov—the party’s headliner—walks into the room and silences the children, essentially saying, “Isn’t it time we tell these squabblers to shut up?”  The ad has extremely amateur production values, as most of the budget probably went to paying the reputed staggering UAH 70,000 a second ($420,000 for 30 seconds) that prime-time political ads are now fetching on major channels.

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Ukraine

I am leaving for Ukraine today, where I will begin my Fulbright studies.  I am hoping to concentrate on the relationship between the natural gas industry and Ukraine’s domestic political situation, a theme that ties into some of the subjects that I’ve written about here.  I will continue to update this blog, though the emphasis may shift southwest a bit, onto Ukraine.  It may take me a bit to get my feet on the ground in Kyiv, however.  On that note, if anyone has an apartment they’d like to rent out, let me know…

Coveting Exxon’s Sakhalin gas

As the Exxon-led consortium that is running the Sakhalin-I project begins to further develop its natural gas plans (complimenting its current oil production of around 250,000 bpd), Gazprom has tried to push the consortium into earmarking the gas for Russian far-east domestic consumption rather than export to China or other Asian destinations.

From the Moscow Times:

“Given that nearly all the gas from the [Gazprom-led] Sakhalin-2 project has already been sold under long-term contracts and other Sakhalin projects are not expected to start production in the medium term, the gas from Sakhalin-1 can be the only source for domestic supplies until at least 2015,” said Vladimir Kozlov, head of Gazprom’s Sakhalin office.

Kozlov goes on to suggest that regional Russian demand will increase from 13 bcm in 2010 to 19 bcm in 2020. He expects Sakhalin-I, which has about 500 bcm of gas reserves, will be able to provide the area with about 11 bcm of that need by 2015, up from the couple bcm being produced annually now.

Sakhalin-I is already producing about 3.8 million cubic meters a day (1.3 bcm per year) which it is supplying to nearby Khabarovsk Krai. It asserts that these deliveries “are expected to fully satisfy the demand for natural gas in that region until 2025.”

Exxon, while acknowledging that it is in discussions with Gazprom regarding potential destinations for Sakhalin-I gas, is still leaning towards the export market:

“Our main principle is economic profitability. So far, we consider the Chinese direction to be the most attractive from the economic point of view,” said Margarita Tsoi, the firm’s government and public affairs manager.

Gazprom is officially the sole export vehicle for Far Eastern gas, according to Russian government decree. However, Exxon’s PSA for the Sakhalin-I project excludes the consortium from having to abide by that regulation, opening the possibility for exporting gas to the more lucrative Asian or North American exports (via LNG), versus the regulated regional domestic markets (via pipeline). There is some thought that Gazprom or the Russian government might try to pressure Exxon into letting Gazprom in on some aspect of the project, much as was done with the Shell-led Sakhalin-II project last year.

The ironic thing about this issue, and particularly the first quote above, is that Gazprom acknowledges that it is happily exporting all of the gas from its project, while it expects the foreign firm to provide its gas for the domestic market. The problem for Gazprom is that they are put into a position that conflicts with its own mission statement. From its latest annual report:

OAO “Gazprom” mission is to ensure an efficient and balanced gas supply to consumers in the Russian Federation and fulfill its long-term contracts on gas export at a high level of reliability.

When Gazprom entered the Sakhalin-II project, the contracts to export the gas through an in-construction LNG plant (mostly to Japan, Korea, and some to the US) had already been accepted. Gazprom is therefore left to either break its international contracts or break its social responsibility to provide domestic gas as warranted by increasing local demand. Gazprom is then forced to turn to Exxon to help out with its internal commitments, a move that the US firm is understandably reticent to carry out.

Of course, just because there may be demand for the gas does not necessarily mean that it has to be delivered (this being the new market-based Russia), but it is very cold up there and a lack of heating supplies could be a serious situation. Gazprom also still feels its social duty carrying over from its history as a government ministry, providing residential gas essentially as a public good.

The Russian government, by the way, received over $370 million from three key PSAs last year, mostly from the Sakhalin-I project.