From the Moscow Times:

Russia achieved an important strategic ambition yesterday by striking a deal to keep its Black Sea Fleet in Ukraine until the middle of this century.

President Medvedev said that the fleet would remain at its port in Sevastopol for 25 years after its present lease expires in 2017, following talks with Viktor Yanukovych, his Ukrainian counterpart. The agreement allows a further five-year extension to 2047.

In return, Ukraine will receive a 30 per cent discount on the price of gas imported from Russia. President Yanukovych said that the concession amounted to $40 billion (£26 billion) in Russian aid over the next decade.

…

Ukraine at present pays $330 per 1,000 cubic metres under a ten-year contract agreed last year by Yuliya Tymoshenko, the former Prime Minister, and Vladimir Putin, her Russian counterpart.

With Ukraine’s economy reeling from the global economic crisis, Mr Yanukovych was desperate to secure concessions from Russia. A lower gas price allows his Government to set a budget for 2010 and release the final tranche of a $16.4 billion bailout from the International Monetary Fund that was suspended late last year.

Mrs Tymoshenko is certain to seize on the agreements to rally opposition to Mr Yanukovych, who beat her in the presidential contest. She described the lease extension as illegal. Mr Yushchenko, who defeated Mr Yanukovych in the 2004 Orange revolution, is also likely to encourage protests after denouncing his rival as a Kremlin lackey.

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A very sad yet not surprising turn of events – a foreign military outpost in exchange of cheaper gas. Why does Russia even need their Black Sea fleet in Ukraine’s waters? It proved instrumental in mobilizing the Russian military to fight a war with Georgia in 2008 (remember South Ossetia and Abkhazia?) With Russia’s new law to protect citizens abroad and an extremist group of ethnic Russians in Ukraine’s Crimea oblast with illegal Russian passports, the construction of a new bridge from Russia’s Caucasus to the Crimea along with a naval fleet brings fears that Moscow may try to use its military power to claim parts of Ukraine.

It’s becoming increasingly apparent that Russia is trying to extend its sphere-of-influence from Soviet times. With Yanukovych acting in Russia’s best interests, Moscow helping to oust the Kyrgyzstan government earlier this month and the very suspicious deaths of the pro-Western Polish President and others in Russia it is quickly materializing – fueled by a new gas pipeline directly to Germany bypassing neighbouring countries. Is this what Obama had in mind when he ‘hit the reset button’ with Russia?