Ukraine's Naftogaz demands $8 billion from Russia for loss of Crimean assets

The Ukrainian oil and gas company Naftogaz has responded to Russia’s counterclaim regarding the compensation amount for Naftogaz’s loss of assets in Crimea, the company announced on Twitter.

According to Naftogaz’s statement, Russia filed a claim in December 2019.

Naftogaz also confirmed the amount of damage compensation it is demanding – around $8 billion, a figure which includes net losses and interest.

The company said in its tweet that the losses were caused by the illegal expropriation of its Crimean assets in 2014.

Naftogaz Executive Director Yuriy Vitrenko had said in a Facebook post on February 10 that the losses amounted to around $8 billion.

Naftogaz and its subsidiaries filed a lawsuit at the Hague Tribunal in October 2016. At the time, the company assessed its losses at $2.6 billion, and said that it had “a number of valuable energy assets” in Crimea.

In winter 2019, the Court of Arbitration in the Hague ruled that Russia was responsible for the Ukrainian company’s loss of Crimean assets. The tribunal ruled that Russia’s actions were illegal and “violated the bilateral agreement between Ukraine and Russia on the mutual protection of investments”, Naftogaz reported. The Russian Justice Ministry refused to recognize the ruling, and pointed out Russia had not participated in the proceedings. The Russian department promised to take “all necessary measures” to protect Russia’s interests.

That marked the conclusion of the first stage of the case. The court now needs to establish the amount of compensation due to Naftogaz.

During the consideration of the case, the Ukrainian company’s assessment of its losses grew initially to $5.2 billion, and then to an amount in excess of $7 billion.

Yuriy Vitrenko said that a session of the International Court of Arbitration in the Hague would be held at the end of 2020 or in 2021.

  Naftogaz, Russia, Crimea, Ukraine