Straightforwardly on the Situation in Ukraine
(Personal Observations).

Help with Answering the Questions Below.

I have returned from Global Business Conference in Houston, Texas. The most frequent question which leaders of leading energy corporations of the USA kept asking me was the following: “Having such reserves, and having received the milliard help from the USA and the countries of Europe, what prevents Ukraine to be independent energy-wise? ” To me as to the American with the Ukrainian roots, and again, to the one who is not indifferent to Ukraine, who has spent more than 100 days on its territory in 2016 trying to understand the situation and to help the country with attraction of investments and transition to the modern type of equipment, puts to a grinding halt, putting it mildly… I’m speaking straightforwardly, and I do not know how to answer this question credibly, knowing the situation, and at the same time how to not turn away potential investors and those who for the present time still goes for helping Ukraine … But I’ll come back to this just later.

USA today… I want to begin with the fact that while preparing for the report to the mentioned above event in Houston, I couldn’t help but paying attention to last statistics of the energy sector of the USA capacity. Daily more than 800 drilling units work on development of existing and new deposits in the country, and only for last 4 weeks more than 80 new drilling rigs were added, and orders for manufacturing of the new super-power and qualitative American equipment keep coming on a regular basis. In the oil and gas industry, as well as in intersecting branches, 9.8 million workers are involved (about 6% of workplaces of the USA), so that the USA would take the advanced positions, overtaking competitors of world power sector several-fold.

Ukraine today… I have arrived to the USA from the country where the first Ukrainian gas has been extracted as far back as in 1920s in the Carpathian region from gas-bearing stratums. Unfortunately, now this region provides only about 3% of the general extraction of gas countrywide. At present in Ukraine it is registered more than 350 gas and oil deposits, gas-and-oil-condensate deposits, as well as oil-and-gas ones. This is only an official data, yet I’m totally silent about the reserves which are not developed deposits or the ones that are in desolation. At that, national power sector of the country doesn’t have a single unit of the new drilling equipment. About 60 machine tools are available and half of them have already reached all the used-up limits. All up to such degree has decayed, that repair more than twice slow down process of drilling and as increases cost of drilling in times. Everything has decayed to such an extent that repair slows down the process of drilling more than twice, while also increases the cost of drilling several-fold. But offers of the USA on deliveries of the new equipment to Ukraine now, consequently, get turned down at the national level, for obvious reasons for Americans. The reason is substantial growth of the price per unit of the equipment due to the expensive materials of the American designs and transportations, while the fact of economical service and trouble-free work of the high-quality equipment is not taken into consideration, which is at least twice longer than of the ones from the Chinese suppliers.

It turns out that such a version is not favorable to the Ukrainian power sector because it excludes corruption, laundering of millions of dollars on necessary and not so service maintenance, on repair of cheap and poor-quality units… Therefore, elections of suppliers take place in a tender format, in the conditions of a corrupted system… Thus, the best American, Canadian and European companies do not have chances of a tender win, which deprives Ukraine of a possibility of purchase of the qualitative equipment. Winning is behind those who deliver the cheap and poor-quality equipment, which is not much better than the one that the country already has and which is already out of action. I should tell about Ivano-Frankovsk Oil and Gas University (the one of the best in the world arena). The educational institution trains hundreds of professionals annually who unfortunately find workplaces not in Ukraine but abroad. What one must do to correct this situation?

Dear friends, I do need your help. I’m asked such questions and asked to prepare the report on how the USA can help Ukraine (besides the finances, because a lot of that had entered the country but in reality it resulted in no changes). How, in conditions of a dead-end situation, to fix economic relationships of the USA and Ukraine. How you would have answered the following questions (write in comments or in personal messages):
1. What kind of help, except for the financial kind, from the countries of the Europe and the USA, may accelerate process of power independence and help with progress of oil-and-gas sector?
2. What guarantees can Ukraine present to foreign investors or, to be more precise, what guarantees one needs to create for investors today?
3. When the private business sector in the country will receive the legislative guarantor of protection and how one may assist it?
4. How it is possible to carry out reforms and to lower a level of corruption in the leading echelons of power?
5. How to adjust an infrastructure of national and private business sectors?
6. What is necessary so that existing and yet not developed deposits have started to work with full power?
7. When the young generation of experts, who already partly have leading positions, will have an opportunity INDEPENDENTLY, on the basis of democratic principles, to operate the entrusted departments?

I wish to add that the energy sector of the USA and its leaders are ready to provide considerable aid to Ukraine, but only not financial one, because such an experience has not justified itself. This time the help of practical character would be good, in the form of consultations, attraction of the best experts of the country, maintenance with the modern equipment, disclosing of used technologies and even assistance in necessary reforms. In other words, to cease to feed them with the fish and to provide with qualitative fishing tackles!

There is only one question actually: whether Ukraine is ready to accept this fishing tackle and to learn how to use it? If it is not ready, then isn’t it a right time to bring the issue to the order of the day?

P.S. I’m assured that Ukraine is worthy to receive the best hi-tech equipment.

– Andrey Avramenko,
CEO of Skyline Energy Development: