US-based fossil fuel companies such as ExxonMobil, Chevron, and Halliburton are taking advantage of Ukraine's privatization campaign by engaging in discussions to acquire the country's oil and gas industry. As Ukraine sells off public assets, the IMF is also imposing austerity measures.
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| Ukrainian President addresses on the privatization of Ukraine |
With the war in Ukraine continuing, the government is embarking on a significant privatization campaign by selling off state assets. In an effort to replace Russian energy exports, US-based fossil fuel companies such as ExxonMobil, Chevron, and Halliburton are engaged in discussions to acquire Ukraine's oil and gas industry. Recently, Ukraine's leader, Volodymyr Zelensky, extended gratitude to corporate lobby groups such as BlackRock, JP Morgan, Goldman Sachs, and Starlink, promising them big business opportunities. Zelensky also declared his country open for business, providing over $400 billion for public-private partnerships, privatization, and private ventures to US companies, and symbolically opened the New York Stock Exchange in September.
Meanwhile, the Ukrainian government has been exploiting the war as a pretext to implement some of the most aggressive anti-worker laws globally. However, China has taken the lead in advocating for peace talks to end the war, and Brazil's President Lula da Silva has supported Beijing's efforts. The West has opposed all diplomatic negotiations, and instead pushed for the NATO proxy war on Russia, escalating the conflict by sending fighter jets and tanks to Kiev.
In the pursuit of lucrative business opportunities, Ukrainian officials frequently travel to the United States. Naftogaz, Ukraine's state energy company, has been courting US corporations, such as Halliburton, which has a notorious history of being involved in corruption schemes, including highly profitable oilfield service contracts in Angola, resulting in a $29.2 million fine from the US Securities and Exchange Commission for violating the Foreign Corrupt Practices Act. Halliburton is the largest provider of fracking services globally, a highly controversial and environmentally destructive gas extraction method banned in the United Kingdom.
Yanis Varoufakis, an economist and former Greek finance minister, has expressed concern about the involvement of Halliburton, Chevron, and ExxonMobil in Ukraine's oil and gas industry, warning of large-scale fracking, which could pose a clear and present threat to Ukraine's agriculture.
Chernyshov, the CEO of Ukraine's state-owned energy company Naftogaz, expressed his desire for Halliburton to significantly increase its involvement in Ukraine's oil and gas industry, stating that he wants them to have a strong presence and even "boots on the ground." He suggested the possibility of joint gas production and production sharing agreements.
In November, Joe Rainey, the president of Halliburton in the eastern hemisphere, met with Chernyshov in Ukraine. Naftogaz proudly announced on its website that it is strengthening its strategic cooperation with Halliburton, one of the world's biggest oilfield service providers, to unlock Ukraine's untapped oil and gas potential. Chernyshov expressed his gratitude to the US government and the American people for their support of Ukraine, emphasizing the importance of their cooperation.
However, it is worth noting that Halliburton has a controversial history. In the 2000s, the company was associated with corruption, and its former CEO, Dick Cheney, was also the Vice President of the US under George W. Bush. Cheney was a key figure in the unlawful invasion of Iraq in 2003, and Halliburton was accused of receiving an unfair advantage in contracts related to the war.
According to a media outlet, KBR, a company that has been awarded $39.5 billion in Iraq-related contracts over the past ten years, was given many deals without any competing bids, including a $568 million contract in 2010 to provide services to soldiers. This deal led to a Justice Department lawsuit over alleged kickbacks.
The Ukrainian government reportedly hopes to drill for offshore natural gas in the Black Sea off the coast of Crimea, which was annexed by Russia in 2014. Despite the overwhelming support of Crimeans for integration with Russia, Ukraine and its NATO sponsors are insisting on retaking the region because of its valuable offshore gas reserves and its deep geostrategic importance for Russia. Russia's only warm water naval base is located in Sevastopol, Crimea, and without it, the sea would become effectively controlled by NATO. Even the RAND Corporation has published a report stating that Russia does not seem to be after Ukraine's gas reserves, as they only amount to less than 3% of Russia's total natural gas reserves.
During his trip to Washington in April, Naftogaz CEO Chernyshov met with former US ambassador to Ukraine Geoffrey Pyatt, who was involved in the US-backed coup that overthrew Ukraine's democratically elected government in 2014. Chernyshov also met with representatives from the International Monetary Fund, which approved a $15.6 billion loan for Ukraine despite never before providing financing to a country at war. Naftogaz stated that successful cooperation with the IMF is crucial for Ukraine's resilience during the war.
Chernyshov used racist language suggesting that Russia is "uncivilized" and emphasized the importance of cooperation with the IMF for stability during times of war. He claimed that Ukraine's partnership with the IMF demonstrates the country's movement towards the "civilized world" and fulfills its "civilizational choice".
Naftogaz, having met the undisclosed conditions for receiving the IMF program, assures that Ukraine is a reliable partner. However, a press release from the IMF in February revealed that the conditions included neoliberal reforms, covering macroeconomic framework, fiscal policy, financing, financial sector policies, and governance.
The reforms aimed to improve private sector productivity and competitiveness through further privatization of state-owned industries and selling off public assets. The IMF also called for draft tax laws to increase revenue and create fiscal space for war repairs. These conditions reflect the Washington Consensus, promoting neoliberal austerity measures that disproportionately harm Ukrainian workers and favor US corporations.
This article is based on the article by Ben Norton on GeopoliticalEconomy.Com.