Ukraine Approves Resource Deal
Photo: Pixabay, illustrative purposes
Ukraine has approved an agreement with the United States for the joint development of natural resources, including oil and gas, Orda.kz reports, citing The Financial Times.
Reportedly, Kyiv agreed to the deal after Washington softened its initial demands, particularly dropping the requirement for Ukraine to contribute $500 billion. The White House has been pushing for such an agreement as compensation for the extensive military and financial support provided to Ukraine.
The agreement has reportedly received approval from Ukraine's Ministries of Justice, Economy, and Foreign Affairs. The document is expected to be signed during President Volodymyr Zelenskyy's upcoming visit to Washington on February 28.
Key provisions in the final version include:
- Establishment of a special fund that will receive 50% of Ukraine's income from "future monetization" of state natural resources, including oil and gas.
- This fund will finance various projects within Ukraine
- Removal of the provision that would have given the United States 100% control over the fund
- The agreement exempts existing revenue flows to Ukraine's state budget from the new fund arrangement
- Exclusion of major Ukrainian oil and gas companies Naftogaz Ukrainy and Ukrnafta from the agreement
- Joint ownership of the fund between Ukraine and the US will be proportional to each country's actual contributions
Notably absent from the agreement are:
- Security guarantees from the United States, which Ukraine had initially requested
- Requirements for investment matching that would have doubled every dollar contributed (which Zelenskyy had previously compared to a 100% interest loan)
Several important details, including the size of American investment and specific terms of joint ownership, will be determined in future agreements. Neither country will be able to sell or transfer their shares in the fund without prior consent from the other party.
The Financial Times and Ekonomichna Pravda confirm that the new agreement no longer contains the controversial provision requiring Ukrainian contributions until reaching the $500 billion threshold.
Previously, Zelenskyy had stated he would be willing to resign if it would bring peace to Ukraine.
Origianl Author: Raushan Korzhumbekova
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