Joseph Cofer Black

Director of the CIA’s Counterterrorist Center (1999-2002) and Ambassador at Large for counter-terrorism (2002-2004)

 In the U.S., privately held energy companies play an important and positive role in economic development in key states like Louisiana, Texas, and North and South Dakota.  While elements of civil society may question the growth of some energy companies, I believe they should do so in a lawful manner and ensuring accusations are based on facts and evidence rather than rumor or innuendo.

Oil and gas has never been an easy industry in which to do business. It represents a strategic segment of any economy centered on a country’s natural resources. Moreover, the production of hydrocarbons can be a political issue, requiring consideration of a wide range of issues including among other things public opinion and national security. From this perspective, Ukrainian conditions are not something out of the ordinary. That said, there are specific risks associated with Ukraine including its fiscal policy, proximity of the fields to military zones, serious corruption and political uncertainty and untoward influence in commercial activities and the role of state owned enterprises. None of these challenges will be solved overnight.

When I advise companies on strategic development, economic factors play a major role as well as political and financial risk. Unfortunately many international companies assess that working in Ukraine has real reputational risk to their business success. Because of allegations of corruption, concerns about the absence of rule of law and the uneasiness associated with non-transparently motivated and false media campaigns against bona fide businesses, many U.S. and western businesses hesitate to invest in Ukraine. When these factors have primacy over economic benefits, investment flows are going to be restrained for Ukraine.

 

 

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