Regal Petroleum...Trading at the wrong price.

A deal will be agreed over the next few days,its all brinkmanship and whats with posting on the numpties thread - have we lost most of grey cells over the
last week.

Ukraine rejects Moscow gas loan offer
By Neil Buckley in Moscow and George Parker in Brussels
Published: December 30 2005 02:00 | Last updated: December 30 2005 02:00

President Viktor Yushchenko of Ukraine last night rejected an offer of a $3.6bn (£2bn) loan from Russia to pay for a big increase in gas prices by Gazprom, the Russian energy company.


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President Vladimir Putin had earlier said Moscow was ready to extend a loan to Ukraine in an attempt to resolve a damaging dispute three days before a Russian deadline to turn off gas supplies to Ukraine.

"We are very grateful for the proposed large credits, but Ukraine does not need them," Mr Yushchenko said, according to Reuters. "Ukraine will pay with its own money at a price set in a comprehensible, objective fashion."

Russia has demanded that Ukraine pay nearly five times as much for Russian gas - part of a wider move by Moscow to end subsidised supplies to former Soviet republics. The move has provoked the biggest rift between the two neighbours since last year's "Orange Revolution" in Kiev. Mr Yushchenko has turned Ukraine towards the European Union and Nato and wrenched it out of Russia's orbit.

The dispute could cause shortages in western Europe if Russia carries out a threat to reduce the gas it pumps into the huge export pipeline that crosses Ukraine from January 1. By doing so, however, Russia would risk damaging its claim to be a reliable energy supplier, just as it takes over the presidency of the Group of Eight industrialised nations with energy security as a main theme.

The European Commission said yesterday the reliability of Russian supplies was "of the highest priority" and it was watching the Russian-Ukrainian dispute closely.

Mr Putin, in televised remarks, told Ivan Plachkov, Ukraine's energy minister, that Russia was prepared to lend "a huge sum" to Kiev to ease the shift to market prices.

"We are ready to provide a loan on commercial conditions directly to [Ukraine's national gas company] under the guarantee of one of the international banks, European or American," the Russian president said.

Mr Putin added that subsidised gas had been acceptable while Russia and Ukraine were part of a planned economy but no longer reflected economic realities.

Mr Yushchenko has said Ukraine is ready to move to market prices over a period of years.

But he said yesterday that Kiev would "never accept" the price of $220-$230 per 1,000 cubic metres Russia is demanding for next year, up from $50 this year. "This price is a provocation," Itar-Tass news agency quoted him as saying.

Gazprom, Russia's natural gas monopoly, earlier said it had signed a deal to buy more gas from Turkmenistan, the second-biggest producer among the former Soviet republics, by more than 50 per cent to 30bn cu m next year.

Analysts said that would leave less spare Turkmen gas available to Ukraine to cover any reduction in Russian supplies. Ukraine, which uses about 80bn cu m of gas annually, buys 25bn cu m from Russia and 36bn cu m from Turkmenistan, which all flows through Gazprom's pipelines.

But Ukraine said it already had a contract with Turkmenistan to buy 40bn cu m of gas next year.