March 3, 2014 8:26 pm
Updated: March 3, 2014 9:32 pm

Who has economic interests in Ukraine? It’s not just Russia

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Above: The crisis in Ukraine is quickly reaching a boiling point not seen since the days of the Cold War. Tom Clark and Paul Johnson report from Ukraine.

Vladimir Putin’s move to protect Russian interests in Ukraine‘s Crimean peninsula go beyond the safety of the Russian-speaking population or the strategic location of its Black Sea fleet.

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Ukraine, according to the Financial Times, has some of the planet’s “richest farmland” and is an important hub for Russian oil and natural gas bound for several European countries.

While Canada, the U.S., the United Kingdom and other NATO or European Union nations issue warnings to the Russians, and even threaten sanctions, some countries may also be keeping an eye on how the crisis could affect them.

READ MORE: Ukraine: Russia demands that 2 warships surrender

After all, the crisis stemmed from protests against an unpopular government decision to abandon a trade pact with the European Union in order to strengthen ties with Russia.

Ukraine is a country of oligarchs, many of whom enjoyed a friendly relationship with former President Viktor Yanukovych.

Their companies have strong toeholds in global markets, and whether or not their allegiances remain with Yanukovych, what happens next in the country could have a ripple effect felt well beyond the Black Sea.

Oil and gas

If Europe wants Russian oil and gas, chances are it’s going through Ukraine. Actually, it doesn’t just want it: Europe needs it. Russia supplies 40 per cent of Europe’s oil and gas; 80 per cent of that goes through Ukraine.

Right now, the pipelines flow west from Russia and into Romania, Hungary, Slovakia and Poland. But there are plans for the routes to extend further and take fuel onwards to Italy, Austria and Germany – the biggest consumer of Russian fuel.

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SEE MORE: Three maps to help understand what’s going on in Ukraine

Heightened tensions over Russia’s ramped-up presence in Crimea sent oil and gas prices up on Monday.

According to BBC, gas futures went up 10 per cent early in the day and the benchmark oil price went up 2 per cent.

Ukraine has its own gas fields, many of which are located in the east, near Russia.

Bloomberg reported Monday the country’s proven gas reserves amount to 39 trillion cubic feet. Foreign companies such as Chevron, which has a $400-million agreement for shale gas exploration in Ukraine, is “closely monitoring” what’s happening.

Exxon Mobil and Royal Dutch Shell also have deals exploration deals for the Oleska shale deposit, but both companies have declined to comment on the situation, according to Bloomberg.

Food exports

Ukraine is often referred to as the “bread basket of Europe” thanks to its fertile black soil.

Agriculture is one of Ukraine’s key industries, accounting for almost 10 per cent of its gross domestic product.

It’s the world’s 9th-largest producer of wheat and 5th-largest corn producer. Rye, oat, beet, sunflower and barley crops are among other major exports.

Ukraine is expected to export 18.5 million tonnes of corn by the end of the 2013-14 marketing season, Reuters reported.

Ukraine sends 20 per cent of its agricultural products (including non-food products) to neighbouring Russia, while the European Union takes 17 per cent, according to Invest Ukraine. China, Turkey and the United States are other key markets.

Foreign agricultural businesses have been linked to corruption in Ukraine. In December, the U.S. Securities Exchange Commission charged American food processing giant Archer-Daniels-Midland with violating the Foreign Corrupt Practices Act.

The SEC accused the Illinois-based company of letting its subsidiaries from making millions of dollars in “illicit payments” to Ukrainian government officials. The company paid a reported $54.3 million in fines for bribes dating back to 2002.

READ MORE: Global stocks tumble as Ukraine tensions intensify

And then there’s Ukrainian billionaire Oleg Bakhmatyuk. His company, Avangardco, is the world’s second-largest egg producer.

Avangardco produced 6.3 billion eggs in 2012, sending products to other former Soviet states, Southeast Asia, the Middle East and parts of Africa.

Trade between Ukraine and China has risen steadily, with more than $380 million worth of Ukrainian exports shipped to the world’s most populace nation in the first half of 2013 alone, compared to $270 million in all of 2012.

The two countries also signed a $3-billion dollar loan-for-corn deal in 2012. The first shipment was sent to China in October, the Financial Times reported.

While the G7 nations issued their condemnations of Russia’s military actions, China is reportedly siding with Russia.

The two have been allies on other geopolitical issue – Syria, for example – and China’s no fan of popular overthrows.

Reuters reported Monday the Chinese and Russian foreign ministers met Monday and, according to the Russian Foreign Ministry, the two world powers are “in agreement.”

“Both sides believe that the appropriate handling of the Ukraine crisis is very important to maintaining regional peace and stability.”

*With files from The Associated Press

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