The IMF's 'Conditions' are a Noose Designed to Steal Ukraine's Huge Offshore Oil and Gas Reserves

Last week The Mud Report wrote about how Geology drives geography which in turn drives cultural adaptation. Researching that article taught me that geology also drives disaster capitalism especially offshore in the Black Sea area. Most of the maps and information i found came from petroleum geology reports. Much of it was confidential but not all of it. Turns out the offshore Black Sea energy landscape is going to change dramatically over the next few years, as the region's nations are working hard to unlock their offshore reserves.

The offshore shelf extending from Romania and Bulgaria past Ukraine and Crimea contain huge deposits of oil and gas. This information isn't broadly known yet, but the oil industry, the investors, bankers and politicians know it, now so do you. The oil and gas industry in the Ukraine is dominated by the state owned company NJSC Naftogaz of Ukraine. Naftogaz now controls more than 90% of the oil and gas production in the Ukraine. Industry analysts say that Ukraine is expected to produce a significant increase in the production of oil and gas in upcoming decades.

'Spring fails in Ukrainian plunderland', as the Asia times says and right on cue, the International Monetary Fund announced today they'd be offering Ukraine a 15 billion dollar package. The IMF is basically the banking division of US and EU imperialism. IMF packages don't require collateral, instead they require that the borrowers sign conditional structural adjustment agreements. As anybody who has read Naomi Klein's Shock Doctrine understands, the IMF's conditions don't come with strings attached, they come with nooses.

As part of a proposed $15 billion IMF deal IMF bankers will make sure Ukraine will be required to undertake tough economic reforms which will hurt ordinary people. As global financial markets expert Patrick Young said today, "Of course we know that it’s the people, it’s the locals, who bear the brunt of all the austerity measures. Speaking about the domestic situation in Ukraine, and specifically about household and gas tariffs – other previous governments refused to increase gas in homes. Why would the new one adopt such unpopular measures? "

Why because the new government, headed by 'our man Yats' [above left], was installed to do just that. Assistant Secretary of State Victoria Nuland was recorded as saying: “Yats is the guy. He’s got the economic experience, the governing experience. He’s the guy you know. … Yats will need all the help he can get to stave off collapse in the ex-Soviet state. He has warned there is an urgent need for unpopular cutting of subsidies and social payments before Ukraine can improve.” Good old Yats, he's our man now eh.

To obtain a loan from the IMF, Ukraine is going to have to sign on to all necessary reform conditions. Apart from changes to social policy, they include 40% gas, electricity and public utilities tariff raising. Wage freeze, pension cuts and public sector job cuts are also on the list. Such drastic measures can further destabilize the situation in the country, experts are warning. The IMF does not provide loans for nothing, it allocates money for specific purposes and in exchange for tough reforms of the whole economy. The main requirement of their financiers is to cut social spending, which will affect the most vulnerable and poor layers of the society. Gas prices may double or even triple.

Of course, the US-EU-IMF cabal know that these conditions will be so unpopular that Yats won't last long and that the results of the upcoming May 25th election will see someone who won't meet them elected. Which is the jolly good news the disaster capitalist vultures await because if/when Ukraine doesn't meet the conditions [think Greece etc.] they'll have already agreed to privatize [turn over to the vultures] the few remaining public assets they have. In my earlier articles on this topic i focused on real wealth of Ukraine's agriculture as being the public asset the IMF's noose capture, and it will be, but not the first.

The first thing the IMF vultures will confiscate is Ukraine's untapped offshore oil and gas reserves. The greatest part of those reserves that have been 'proven' so far sit off the coast of, guess where, Crimea.