Editorial: Crimea Secedes, Russia Cashes In On Shale?

"Russia is a riddle wrapped in a mystery inside an enigma." Winston Churchill (1874-1965)

After a 97 per cent vote in favour of seceding from the Ukraine, President Vladimir Putin today formally apprised his parliament of Crimea's request to reintegrate into the Russian Federation.

On Monday afternoon, the EU and US declared the Crimean vote illegal, freezing assets and imposing travel sanctions on 32 prominent political officials.

One of those sanctioned men - Vladimir Konstantinov, Speaker of the Crimean parliament - declared measures to fast-track the reabsorption of Crimea into the Russian milieu, including the adoption of the Russian rouble and switching to Moscow Standard Time – some two hours ahead of Kyiv.

At the same time, the russifying Crimean legislature also approved a bill of asset confiscation for Ukrainian oil and gas organisations operating in Crimean territory. Assets owned by Chernomorneftegaz and Ukrtransgaz have reportedly been seized, nationalised and renamed the "Crimean Republican Enterprises".

Ukrainian hydrocarbon resources in the Crimean Black Sea and Sea of Azov arenas have similarly been claimed as sovereign possessions and been placed under armed guard.

Former President of Georgia, Mikheil Saakashvili, has mooted the peninsula’s large offshore shale gas reserves as the primary motivation behind its endocytosis, and political turmoil inside Ukraine has brought the country’s extant drilling to a standstill.

A consortium comprising ExxonMobil, Shell, OMV Petrom and Ukraine’s Nadra Ukrainy had been working to bring the Black Sea Skifska field and 200 to 250 billion cubic metres of natural gas online by 2015. Given the current political standoff, this timescale is likely to prove unmanageable.

As the Crimean story continues to unfold, one thing is for sure - the way the Russian Bear’s mind works is no less enigmatic in 2014 than it was in Churchill’s day….