Washington has dropped its toughest demands: Ukraine agrees deal with US - Financial Times
Kyiv • UNN
Kiev is ready to sign an agreement with the USA on joint development of mineral resources after revising the terms. The USA has waived its claim for the right to $500bn of potential revenue, now 50% of the profit will be invested in Ukrainian projects.
Kiev has agreed terms with Washington on a mineral deal that Ukrainian officials hope will improve relations with US President Donald Trump's administration and pave the way for a long-term US security commitment, reports UNN citing the Financial Times.
According to the newspaper, Ukrainian officials say Kiev is now ready to sign an agreement to jointly develop its mineral resources, including oil and gas, after the U.S. dropped demands for the right to $500 billion in potential revenue from resource exploitation.
Officials claimed they had negotiated much more favorable terms and presented the deal as a way to expand relations with the U.S. to bolster Ukraine's prospects after three years of war.
“The minerals agreement is only part of the picture. We have heard many times from the US administration that it is part of a bigger picture,” Olga Stefanyshyna, Ukraine's deputy prime minister and justice minister, who led the talks, told the Financial Times on Tuesday.
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The publication recalls, the extremely onerous terms of the original draft - which President Donald Trump presented as a way for Ukraine to reimburse the United States for military and financial aid after a full-scale Russian invasion in 2022 - sparked outrage in Kiev and other European capitals.
After President Volodymyr Zelensky rejected that initial text last week, Trump called him a “dictator” and apparently accused Ukraine of starting a war.
The final version of the agreement, dated 24 February and seen by the FT, envisages the creation of a fund to which Ukraine will contribute 50 percent of revenues from the “future monetization” of state-owned mineral resources, including oil and gas, as well as related logistics. The fund would invest in projects in Ukraine.
It excludes mineral resources that already contribute to the Ukrainian state treasury, meaning it would not cover the current operations of Naftogaz or Ukrnafta, Ukraine's largest gas and oil producers.
However, the agreement makes no reference to the U.S. security guarantees that Kiev initially insisted on in exchange for agreeing to the deal. It also leaves important issues such as the size of the U.S. stake in the fund and the terms of “joint ownership” deals to be resolved in subsequent agreements.
After three years in which the U.S. was a major donor of military aid to Kiev, Trump reversed Washington's policy of initiating bilateral talks with russia without European allies or Ukraine at the negotiating table.
Ukrainian officials said the deal had been approved by the justice, economy and foreign ministers, and raised the prospect of Zelensky traveling to the White House in the coming weeks for a signing ceremony with Trump.
“This will be a chance for the president to discuss the big picture. And then, after that, we can think about the next steps,” an official said.
The Trump administration's original sweeping proposal called for the creation of a reconstruction investment fund in which the United States “retains a 100 percent financial interest.” Ukraine would contribute 50 percent of the fund's revenues from mineral production, including oil and gas and related infrastructure, up to a maximum of $500 billion.
These conditions, which Ukrainian officials called unacceptable, were removed from the final draft.
The FT writes that the fund's mandate to invest in Ukraine is another change that Kiev has been seeking. The document says that the USA will support Ukraine's economic development in the future.
Ukrainian officials added that the deal was only a “framework agreement” and that no proceeds would change hands until the fund was established, giving them time to settle any potential disagreements. Among the outstanding issues is agreeing on the jurisdiction of the agreement.
Zelensky's government will also have to get approval from Ukraine's parliament, where opposition lawmakers have signaled they will at least hold a heated debate before ratifying such a deal.