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The Russian government said it was taken by surprise Tuesday when the rebel leader of a breakaway region of eastern Ukraine proposed the creation of a new nation-state called Malorossiya, or Little Russia.

The head of the self-declared Donetsk Peoples Republic, Alexander Zakharchenko, told reporters that the new country would include his territory and the neighboring self-declared Luhansk Peoples Republic, and that it would eventually become part of a wider union with Belarus and Russia.

"We believe that the state of Ukraine cannot be reinstated the way it used to be, he said.

Russia, which openly sympathizes with the pro-Russia separatists but rejects allegations that it has provided military support, denied any role in the proposal and said it still backed the 2015 peace agreement crafted in Minsk, Belarus, to reintegrate the breakaway territories into Ukraine.

Alexander Ermochenko / European PressPhoto Agency

Alexander Zakharchenko, leader of the self-proclaimed Donetsk People's Republic, speaks in downtown Donetsk, Ukraine, on Jan. 22, 2016

Alexander Zakharchenko, leader of the self-proclaimed Donetsk People's Republic, speaks in downtown Donetsk, Ukraine, on Jan. 22, 2016 (Alexander Ermochenko / European PressPhoto Agency)

The proposal for Malorossiya was nothing more than a personal initiative of the rebel leaders, Kremlin spokesman Dmitry Peskov told reporters.

The idea should be subject to reflection and analysis, but we remain committed to the Minsk accords, he said.

Boris Gryzlov, Russia's envoy to the Minsk talks, remained silent for several hours after the announcement, but later in the day dismissed the idea as nothing more than fodder for public discussion.

This announcement does not have any legal consequences, he told Russian news agencies.

Even the rebel government in Luhansk seemed caught off guard by the proposal to include it in a new country.

Luhansk had not been informed of the plans and we are not willing to consider it as something that needs attention, a representative told the news agency Interfax.

Ukrainian President Petro Poroshenko, however, suggested that Russia was behind the rebel announcement, saying at a news conference in Tbilisi, Georgia, that Zakharchenko is not a political figure, but a puppet transmitting the Kremlin messages.

He promised to bring the eastern regions and Crimea back into Kievs fold.

The conflict in Ukraine began in 2014 after a mass street movement led to the ousting that February of pro-Kremlin President Viktor Yanukovich.

Russia, which criticized the demonstrations as a Western-orchestrated coup, moved troops into the Crimean peninsula, ostensibly to protect its compatriots and Russian speakers from Ukrainian nationalists. But in March 2014, Russia annexed Crimea, and in the regions of Donetsk and Luhansk, pro-Russia separatist militia groups took over government buildings and declared independence from Kiev.

The Minsk peace talks, which were orchestrated by Germany, Britain and France, have stumbled as fighting has continued to flare up in the region. More than 10,000 people have died in the conflict, many of them civilians. Peace talks were scheduled to resume this week.

Zakharchenko made his announcement at a news conference in the city of Donetsk, which he said would be the capital of the new country. He wore fatigues and various medals on his chest.

He presented a newly written constitution for Malorossiya, a map showing all of Ukraine except Crimea, and a flag to represent the new state. The flag was adapted from that of Bohdan Khmelnytsky, a 17th century Cossack leader who led a revolt against Polish rule in Ukraine and later swore allegiance to Russia.

Its not a revolution; its a return to history, Zakharchenko said.

The name Malorossiya comes from the historical name for parts of Ukraine that once made up the Russian empire. By choosing the name, the rebel governments seemed to be replacing Novorossiya, another historical term once used by Russian President Vladimir Putin to describe the southeast territories of Ukraine.

Novorossiya became a concept many rebel leaders and fighters saw as a Kremlin-approved initiative to expand its territories. But Russia distanced itself from the idea as the war raged on, Western sanctions began to hurt its economy and the Minsk agreement came into force.

In Washington on Tuesday, a representative of the State Department who was asked about Malorossiya said: That is something thats certainly an area of concern to us, but beyond that, I dont want to dignify it with a response."

Republican Sen. John McCain of Arizona released a statement blaming the Russian president, saying that the ultimate responsibility for this latest flagrant violation of Ukraine's sovereignty lies squarely with Vladimir Putin's Russia, upon whose leadership, financing, troops and weapons the separatists are entirely dependent.

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Experience Los Angeles 2049 at the Blade Runner 2049 Experience, only at Comic-Con.

Ayres is a special correspondent.

sabra.ayres@latimes.com

Twitter: @sabraayres

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Ukraine's separatists propose a new country: Little Russia. Kremlin denies any involvement - Los Angeles Times

ByKayla Christopher For The Oklahoman Published: July 20, 2017 5:00 AM CDT Updated: July 20, 2017 5:00 AM CDT

An apartment building on fire in Ukraine on July 16. Soldiers with the Oklahoma Army National Guard deployed to Ukraine rushed into the building and evacuated the third floor before firefighters arrived. [Photo by1st Lt. Kayla Christopher]

LVIV, UKRAINE During a routine morale, welfare and recreation trip, deployed citizen-soldiers of the 1st Battalion, 279th Infantry Regiment, 45th Infantry Brigade Combat Team, found themselves in a situation that put their military and civilian training to good use.

"We were about to head back to base when we saw smoke coming from down the street, so we decided to investigate," said Sgt. Matthew Odom, of Norman, who is assigned to Headquarters Company, 1st Battalion, 279th Infantry Regiment, 45th IBCT.

An apartment building had caught fire.

Odom, along with fellow Thunderbirds Sgt. Nelson Deese, Spc. Vincent Humerickhouse, Spc. Kellar Jackson, Spc. Aaron Moore and Pfc. Kevin Polk, rushed into the burning building and evacuated the third floor before firefighters arrived on the scene.

"We kept asking if there was anyone still in the building, and finally we found someone who spoke English who said that there was," Odom said. "Sgt. Deese and I just gave each other a look; it was like we knew what the other was thinking and we just stormed in."

"Instinctively, we all just ran inside and started getting people out," said Jackson, a native of Watonga. "There was a lot of smoke. It was chaotic and intense."

Jackson said the language barrier made the situation more difficult.

Deese, who serves as a volunteer firefighter in his community of Crowder, said his training as a firefighter and infantryman just kicked in.

"We were knocking on doors and windows trying to get people's attention," Deese said. "They were definitely not aware of the fire."

Once firefighters arrived, Deese made sure his fellow soldiers were safely outside the burning building before he pitched in to help the firefighters, unrolling hose and helping them move equipment upstairs.

"I feel like most soldiers, especially infantrymen, we run to the fight," Deese said. "Not a single hesitation."

Soldiers with the Oklahoma Army National Guard's 279th are deployed to Ukraine in support of the Joint Multinational Training Group-Ukraine, an international coalition dedicated to building the training capacity of the Ukrainian army.

"I'm proud of the actions these soldiers took to ensure the safety of others," said Lt. Col. Bruce Lambeth, commander of the 279th.

"They are true examples of Oklahomans upholding the Oklahoma Standard; in this case, looking after their global neighbors while serving their state and country abroad here in Ukraine."

Kayla Christopher is a 1st lieutenant with the 45th Infantry Brigade Combat Team.

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Oklahoma National Guard soldiers rescue people from burning apartments in Ukraine - NewsOK.com

WASHINGTON/HOUSTON (Reuters) - The United States on Thursday admonished Exxon Mobil Corp for "reckless disregard" of U.S. sanctions in dealings with Russia in 2014 when Secretary of State Rex Tillerson was the global oil company's chief executive, and fined it $2 million.

ExxonMobil said the decision was "fundamentally unfair," and sued the U.S. government in Texas in an effort to overturn the decision.

The fine came after a U.S. review of deals Exxon signed with top Russian oil producer Rosneft weeks after Washington imposed sanctions on Moscow for annexing Ukraine's Crimea region.

Between May 14 and May 23, 2014, top U.S.-based ExxonMobil executives signed eight documents with Igor Sechin, the head of state-run Rosneft, the U.S. Treasury's Office of Foreign Assets Control (OFAC) said in a statement on its website.

ExxonMobil had "demonstrated reckless disregard for U.S. sanctions requirements" by signing the deals with Sechin just weeks after the United States blacklisted him, OFAC said in an unusually lengthy three-page statement laying out its reasoning. (For the Treasury statement, see: bit.ly/2vnvQf2)

The Treasury announced sanctions on Sechin in April 2014 as part of measures to pressure Russia over its intervention in Ukraine, saying Sechin had shown "utter loyalty" to Russia's President Vladimir Putin.

The sanctions prohibit U.S. citizens or those located in the United States from dealing with those on the blacklist, such as Sechin. Rosneft itself is subject to narrower U.S. sanctions that still allow Americans to deal with the company on some transactions.

Tillerson left ExxonMobil to become secretary of state after 10 years at the helm of the global energy power. He is now responsible for U.S. foreign policy, which includes helping to make sanctions decisions.

The State Department referred questions about the fine to ExxonMobil and the Treasury. State Department spokeswoman Heather Nauert told reporters on Thursday that the agency was alerted to the fine on Wednesday.

Though the State Department plays a part in formulating broad sanctions policy, former U.S. officials and sanctions experts said it was unlikely the agency had a role in deciding the fine announced on Thursday.

ExxonMobil had fully complied with guidance from Democratic former President Barack Obama's administration that ongoing oil and gas business activities with Rosneft were permitted, Exxon spokesman Alan Jeffers said in a statement.

The Treasury Department "is trying to retroactively enforce a new interpretation of an executive order" inconsistent with its prior guidance, Jeffers said.

"OFAC's action is fundamentally unfair," he said.

Sechin signed the documents on behalf of Rosneft, Jeffers said.

ExxonMobil also cited a Treasury Department representative's comments in May 2014 that BP Plc Chief Executive Bob Dudley - an American citizen - could continue to participate in Rosneft board meetings so long as they related only to Rosneft's business.

In its statement explaining the fine, OFAC said that the Treasury representative's comments did not address ExxonMobil's conduct.

No White House or Treasury statements asserted "an exception or carve-out for the professional conduct of designated or blocked persons, nor did any materials suggest that U.S. persons could continue to conduct or engage in business with such individuals," OFAC said.

Publicly available guidance on Treasury's website at the time of Exxon's dealings with Sechin said Americans should ensure they do not enter into contracts signed by sanctioned individuals, OFAC said.

By dealing with Sechin, the company "caused significant harm" to U.S. sanctions on Russia, the Treasury said.

Because Rosneft itself is not off-limits to Americans, another company executive could have signed the contract with no sanctions risk to ExxonMobil, said David Mortlock, who was a State Department and White House sanctions official during the Obama administration.

"You could have Sechin standing over the guy's shoulder," said Mortlock, now an attorney at Willkie Farr & Gallagher LLP in Washington. "But the problem here is that it was signed by Sechin himself."

The fine is minor to ExxonMobil, which made $7.84 billion in profit in 2016.

The company has long opposed sanctions on Russia. Tillerson said in 2014 that the company did not support sanctions because they are not effective "unless they are very well implemented."

Nevertheless, in May 2014 Tillerson chose not to attend an oil industry forum in Moscow, instead sending top lieutenant Neil Duffin, who signed an agreement with Sechin to explore for oil in the Arctic Ocean.

The deal came at a time when other oil companies, including BP and Total SA, were clamoring to enter Russia, aiming to tap its vast oil and natural gas reserves.

As the United States and others tightened Russian sanctions, ExxonMobil's ability to operate there dwindled. The company was allowed to finish drilling a well in the Russian Arctic in the fall of 2014 but could not produce oil.

ExxonMobil has since sought permission to operate in Russia. Earlier this year, the Trump administration said it would not let any U.S. company, including ExxonMobil, drill in areas prohibited by U.S. sanctions on Russia.

Reporting by Yeganeh Torbati and Ernest Scheyder; editing by Simon Webb and

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US fines Exxon Mobil over Ukraine-related sanctions violations - Reuters

Since the conclusion of Maidan, politically motivated private security actors operating in parallel with the Ukrainian government have played an integral part in the countrys security landscape. While some have been cooperating with Ukrainian authorities, others experience great friction with the Ukrainian Armed Forces (UAF) and Ministry of Interior Affairs (MIA), undermining the formal security structures of the Ukrainian government. It seems that political and military power have become inseparable at the unit level, with many battalion commanders also being career politicians or parliamentary members.

The term volunteer battalion is common vernacular in the context of post-Maidan Ukraine. While the term may seem straightforward to anyone with a basic familiarity of the conflict in eastern Ukraine, it encompasses a wide range of units active and inactive in the Anti-Terrorist Operation (ATO) zone today. Effectively, these units can be viewed along an axis of patronage, with those relying on the government as the primary patron representing the formal units, and those that rely on civil society representing the independent units.

Frictions with the government and lasting connections to political entitiesa result of a haphazard, and in some instances nonexistent, reorganization effortraise questions about the allegiances of these units. If unchecked, some of these units will erode the legitimacy of the Ukrainian security institutions.

A persistent issue facing Kyiv originates in its own complacency, and to some degree the ambivalence of the Ukrainian people towards security institutions. Since the beginning of the conflict in the Donbas, far-right nationalist militias operating completely independently from the government have been a recurring theme, and while many have demobilized, integrated into the formal security structure or entirely disbanded, some still persist. The two largest groups that represent this phenomenon are the Pravy Sektor Ukrainian Volunteer Corps (DUK) and the Ukrainian Volunteer Army (UDA) militias. While both share a common history, they have come to diverge in how they interact with the government.

In late March 2015, well after illegal groups were issued a general stand-down-and-disarm order, Pravy Sektor was ordered to leave the coastal frontline city of Mariupol and the ATO area. Pravy Sektor, which believed themselves to have an agreement with the Ministry of Defense regarding their presence in the ATO zone, considered the order treacherous. Months later, Pravy Sektor ended up in a shootout with Ukrainian authorities after an extensive standoff. After the standoff between DUK and police in late 2015, Peoples Deputy and former leader of Pravy Sektor Dmitro Yarosh resigned from Pravy Sektor. He took the fifth and eighth DUK battalions with him to form the Ukrainian Volunteer Army (UDA) under his own new political party. Shortly after, DUK disbanded virtually its entire structure in order to carry out an extensive reform. It aimed to organize itself on a small amount of active combat units, with a large reserve force built around the sotni structure.

Units of the Ukrainian Volunteer Army under Dmitro Yarosh and his political party Diya (Action) enjoy an improved relationship with the Ukrainian government compared to DUK. The UDAs two combat battalions and single medical battalion are funded through citizen initiatives, supplying them with everything a light infantry battalion could need. These initiatives are funded by private donations of material support or financial deposits. The UDA has an exceptionally good relationship with official Ukrainian units compared to other independent volunteer units, and will in some cases even invite UAF units onto their bases to conduct joint drills.

Equally interesting is the case of the Organization of Ukrainian Nationalists (OUN) and their volunteer battalions. After a prolonged standoff with the UAFs 93rd Separate Mechanized Brigade in the frontline town of Pisky in 2015, the OUN agreed to relinquish its command of part of its battalion and let it integrate with the formal Ukrainian security structure under the Ministry of Defense. This specific brigade has come to be the destination for a number of other formerly independent volunteer units, such as the Carpathian Sich, a unit with deep connections to the political party Svoboda (freedom). Still, the unit maintains its relationship with the OUN, which is one of the oldest Ukrainian nationalist organizations, and has been ripe with controversy throughout the past century.

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Ukraine Needs to Address Its Paramilitary Problem | The National ... - The National Interest Online

The conflict between Ukraine and Russia has taken on many facets, of which the energy-related ones are seemingly the easiest ones to solve. As Kiev and Moscow are exploring the limits of arbitration, it seems that all the necessary prerequisites and conditions for a potential settlement are present. It has to be said that such a dispute adjustment faces numerous obstacles, with political headwinds dominating not only the two nations energy discourse, but also its coverage in the media. If one is to avoid the temptation to have recourse to the usual finger-pointing and rather delve into the realm of figures, the potential for cooperation is easily detectable.

Ukraines gas market is in a dire condition. Despite many potentially favorable measures initiated by the cabinet of ministers, i.e. the unbundling of Naftogazs activities, the corruption-ridden character of Ukraines public administration has led to scant progress in their implementation. In just three years, gas consumption has fallen by 40 percent (see Graph 1) due to the ongoing conflict in Ukraines Eastern regions, as well as several-fold increases in gas prices, as mandated by the IMF. Ukraines gas transmission system urgently needs refurbishment and modernization, only immediate costs to cover for supplies by 2030 amount to at least $3 billion. Moreover, its pipelines are becoming obsolete, too, Gazproms Nord Stream pipelines operate under 120 bar pressure, whilst Ukraines are 75 bar. Yet on the back of arbitration dealings, visceral political atmosphere and full cessation of Russian imports, Russian transit to Europe has actually increased in the last two years and Ukraine assured supply safety for transited volumes, so coming to an agreement is not a delirious idea.

Graph 1. Ukraines Domestic Gas Consumption, Russian Gas Imports and Transit 2000-2016.

(Click to enlarge)

The protracted arbitration proceedings at the Stockholm Arbitration Court have so far only partially indicated where the Russo-Ukrainian gas issue could develop further. The claims and counterclaims are very unlikely to yield any sensational result, Gazproms $44.8 billion take-or-pay non-payment claim seems to be dismissed on the ground that Kiev neednt have paid the minimum take-or-pay price as there was a material change in market circumstances, a clause included in the contract. Naftogazs claim that Gazprom applied unfair pricing from 2011 is also believed to be significantly curbed, as the Stockholm Court ruled that it was only after 2014 that such practices could be observed. The Courts overall ruling will try to counterbalance the two sides claims, possibly with a little tilt towards Naftogaz (apart from legal factors, politics will make an impact, too, as any large Gazprom victory would result in a Naftogaz bankruptcy). Yet the arbitration will achieve what the two sides by themselves could not place the Russo-Ukrainian gas issue into a wider European context, equating it to effective terms that became norm with Gazproms other European partners. Related:The Only Way OPEC Can Kill U.S. Shale

Since December 2015, Ukraine is buying gas to its own detriment. In every single month since the abrupt cessation of supplies, the price of reverse gas supplies has significantly exceeded that of Gazproms European average (see Graph 2). By buying reverse Russian gas, supplied to Kiev by European traders, Ukraine is losing $35-40 million on a monthly basis, which, given the wretched state of its public finances and its economy (GDP-wise it is back to 2005 levels), is a sore neglect. Although it would be politically suicidal to express interest in resuming supplies, Ukraines Naftogaz has admitted that the price it pays for reverse gas could be more favorable. Hopes that LNG supplies transported to Ukraine via Poland might be profitable are plainly wrong under current market conditions, only a considerable price hike in global oil prices could alter the balance as both Poland and Ukraines gas supply contracts (valid until 2022 and 2019, correspondingly) are oil-indexed.

Graph 2. Gazproms Average European Gas Price vs Ukraines Average Fact Price (December 2015 June 2017)

(Click to enlarge)

Since 2015, Gazprom has repeatedly confirmed that it seeks to nullify the Ukrainian transit route after the currently effective 10-year contract runs out in 2019. There are numerous obstacles to this, however, as even the 55 BCm/year throughput capacity Nord Stream 2 and TurkStreams 15.75 BCm/year branch destined for Southeastern Europe cannot fully cover Ukraines 82.2 BCm transit (as of 2016, expected to reach 88-90 BCm in 2017). Therefore, Gazprom officials have acknowledged the full cessation of gas transit via Ukraine is improbable and stated that approximately 15 BCm per annum will be supplied after 2019. Even if a sweeping renaissance of relations were to take place between Moscow and Kiev, Ukraine will no longer be a priority for Russian exporters, as the Baltic route is economically more profitable. Apart from being 1800km shorter than the Ukrainian route and as a consequence being closer to Russias leading gas-producing regions which are drifting all the more to the north, it entails no transit fees. Related:4 Reasons Oil Will Rally Back To $50

Whilst the Stockholm Arbitration will curtail Gazproms maneuvering possibilities in Ukraine and dovetail it with dealings vis--vis other European partners, it is unlikely to influence Ukraines tariff-setting much. Yet it remains one of the key factors if Ukraine is intent to keep at least the 15-20 BCm/year transit further on. The Kiev-set tariffs are currently prohibitively high, for instance, transiting to Slovakia totals $32.8/MCm, almost the same as the total fee for Nord Stream ($37/MCm). According to Naftogaz, this is due to cover amortization costs which occurred as a result of the 115BCm/year pipeline systems underutilization it now operates around 60% of capacity, in 2014-2015 it was oscillating around 50%. Traditionally, Naftogazs transportation branch has been used to cross-subsidize pretty much all the other branches which operated at a loss, yet this has to change. The underlying logic is fairly obvious. Even though the re-export clause that Gazprom incorporated into the previous contracts is now gone, Ukraine has no chances whatsoever of exporting gas to Russia. If it wants to garner any transit money, it must reconsider the foundations of its tariff-setting.

All in all, the resolution of the gas dispute between Ukraine and Russia is both feasible and desirable. Moscow needs it because it seems unlikely it will be able to find another viable transportation route for Central European countries that would not jeopardize its other commitments, Kiev, on the other hand, ought to come to terms with the fact that no one apart from Russia will use its gas transportation system for transiting. Even if gas transit is limited at 15-20BCm/year, the $500-600 million to be earned from this is too big a sum to be shrugged off, especially for depression-stricken Ukraine. Political issues, such as the appropriate determination of Crimeas legal status or the unobjectionable fulfillment of the Minsk Agreements, represent a far bigger challenge it would be a waste not to normalize relations at least in the gas sector.

By Viktor Katona for Oilprice.com

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