Kyiv: Ukraine has collected $2.1 billion from Russia’s Gazprom

Naftogaz CEO Andriy Kobolyev told LigaBusiness in an interview that, in reality, the company has managed to collect $2.1 billion from Gazprom in the form of gas that Ukraine did not completely pay for, in other words 45% of the compensation awarded to Kyiv by the Arbitration Institute in February 2018. Kobolyev noted that the amount went “almost entirely to the Ukrainian budget”. According to him, taking into account the accrued interest, Kyiv is still planning to collect another $3 billion from the Russian company. “I believe we will get the remaining amount,” Kobolyev said.

He also described several potential scenarios of future interaction with Gazprom. The most positive scenario, in Kobolyev’s opinion, would be the signing of a new gas transit contract between Gazprom and the new operator of Ukraine’s gas transportation system (GTS), which has been separated from Naftogaz. According to Kobolyev, this option is commercially expedient and in keeping with the logic of the market.

There is another scenario which the head of Naftogaz considers the most likely, namely that Gazprom will not sign such a contract, but at some point, noticing that its share of the European market is being taken over by other companies, it will return to the bargaining table with the new GTS operator.

Kobolyev considers it possible that the EU will put pressure on Ukraine if there is a gas crisis. “I am convinced that a number of European states which have recently been siding regularly with the Russian Federation in international affairs will pressurize us extremely severely. But in this situation, Ukraine needs to hold its position,” he added.

“Gazprom’s primary argument in Europe is that the Ukrainians are not your partners, but we, the Russians, are your partners. And this argument works – nothing strengthens friendship quite the way that mutual commercial interest does,” remarked the head of Naftogaz.

Kobolyev said that an extreme scenario would be a return to the Stockholm Arbitration Institute with a lawsuit for $12 billion if transit ceases. “We are working to minimize the state’s economic losses from a possible termination of transit by the Russians,” he added.

On Wednesday, Russian Energy Minister Alexander Novak said that new gas negotiations between Russia, Ukraine and the EU could take place next week. He said that the primary condition that needed to be met would be for Gazprom and Naftogaz to draft the necessary papers for the signing of an agreement. However, the Russian energy minister said that the companies must deal with two issues – the “settlement of debt” and the “legal disputes”.

The current transit contract between Naftogaz and Gazprom expires on December 31, 2019. Ukraine, Russia and the EU have already had several rounds of negotiations regarding a future solution, but without reaching any concrete agreements.

On November 18, Gazprom officially offered Naftogaz a choice: to extend the current contract by one year, or to sign a new one-year contract. However, as a precondition, the Russian company insisted that Naftogaz waive all of its legal claims and withdraw all of its lawsuits. However, Ukrainian Prime Minister Oleksiy Honcharuk said that Kyiv is not interested in a temporary agreement.

  Naftogaz, Russia, Ukraine, Gazprom