NJSC Naftogaz Ukrainy and the companies controlled by it paid UAH 116 billion of taxes, fees and mandatory payments to the state and local budgets in 2021, the company’s press service said on Wednesday.
According to it, proceeds from the group amounted to 10.7% of the total state budget revenues for the last year (according to preliminary data – UAH 1.084 trillion).
In particular, the enterprises of the group transferred to the state budget about UAH 106 billion in taxes, fees and mandatory payments, and the parent company also paid UAH 10.3 billion in VAT for customs clearance of imported natural gas throughout the year.
“The national company provided a tenth of all revenues to the state budget of Ukraine. To understand, almost so much was directed to the needs of the Ministry of Defense in 2021,” Head of Naftogaz Yuriy Vitrenko said on his Facebook page.
“Despite all the reproaches that Naftogaz was spending state funds, this year we proved the opposite. The national company not only did not take a single coin from the state treasury, but also paid all taxes in full,” he said.
The Constitutional Court of Slovakia has satisfied the complaints of NJSC Naftogaz Ukrainy about the violation of its rights to a fair trial, recognizing that the company incurred unreasonable costs in the framework of enforcement proceedings in the republic.
The press service of the company clarified that the matter concerns enforcement proceedings, which have been carried out in Slovakia since 2017 on the initiative of Italia Ukraina Gas S.p.a. (IUGAS) and its successor Trameta kft (Hungary) in order to recover from Naftogaz a fine of $12.7 million and interest on the final decision of the Arbitration Institute of the Stockholm Chamber of Commerce dated December 19, 2012.
At the same time, within the framework of the compulsory execution of the arbitral award, the Slovak bailiff seized the Naftogaz gas imported through the territory of the republic.
The press service noted that numerous abuses by the bailiff within the proceedings led to the artificial formation and accumulation of Naftogaz’s debt in the amount of about EUR22 million for the alleged storage of the previously seized natural gas, although neither the executor nor the custodian company provided any or documentary evidence of the fact and the cost of its storage.
“The decision of the Constitutional Court of Slovakia in favor of Naftogaz has come into legal force and is not subject to appeal. With this decision, the Constitutional Court overturned the decision of the District Court of Bratislava II on the obligation of Naftogaz to reimburse the costs of the alleged gas storage in the amount of more than EUR11.5 million. Thus, the district court of Bratislava II is obliged to reconsider the complaints of Naftogaz regarding the illegal and unfair accrual of executive expenses,” the company said.
Naftogaz’s lawyers have already prepared an application to the Bratislava District Court with a petition to reconsider the issue of the validity and legality of gas storage costs and will submit it in the near future.
According to Naftogaz, these enforcement proceedings became the largest in the history of Slovakia.
Naftogaz recalled that the fine was awarded by the Stockholm Arbitration Tribunal following a dispute over a contract for the supply of 13 billion cubic meters of gas during 10 years at a fixed price of $110/1,000 cubic meters, which was signed in 2003 with IUGAS at that time by the deputy head of the Naftogaz board Ihor Voronin. At the same time, Voronin signed the agreement without the necessary approvals, and Italian citizen Marco Marenco, who owned IUGAS at the time of its conclusion, was later convicted in his homeland for fraud and tax evasion.
Thermal power producers have reduced their debt to NJSC Naftogaz Ukrainy by UAH 22.03 billion through mutual settlements in accordance with the law on measures aimed at settling the debt of heat supply and heat generating organizations and enterprises of centralized water supply and drainage.
This was reported in a company’s press release on Thursday.
“It was possible to carry out mutual settlements in an extremely short time thanks to effective cooperation between Naftogaz, the Ministry of Communities and Territories Development of Ukraine, the Ministry of Finance of Ukraine, the State Treasury Service, thermal producers and relevant state administrations,” the document says.
According to the company, “debt settlement and timely payments for consumed natural gas are critically important to ensure a stable passage of the heating season.”
NJSC Naftogaz Ukrainy has funds for the purchase and subsequent injection of natural gas into underground gas storage facilities (UGS), Ukrainian Energy Minister Herman Haluschenko has said.
“Naftogaz has been provided with the appropriate financial resources to continue accumulating gas further,” he said during a government meeting.
Earlier, the Ministry of Energy said that Ukraine plans to start the heating season 2021/2022 with 19.2 billion cubic meters in UGS.
According to the Interfax-Ukraine agency, Naftogaz will receive funds from Gas Transmission System Operator of Ukraine under the compensation agreement with Ukrtransgaz, recommended by the Cabinet of Ministers of Ukraine for signing in accordance with resolution No. 1187-r dated September 29, 2021.
NJSC Naftogaz Ukrainy plans to end 2021 with a net profit, CEO Yuriy Vitrenko has said.
“We are doing everything to show that, in the results of this year, Naftogaz is no longer a loss-making company and is financially stable,” he told Interfax-Ukraine on the sidelines of the YES Brainstorming 2021 forum in Kyiv on Friday.
Vitrenko recalled that the stability of Naftogaz largely depends on the solvency and financial discipline of its counterparties to whom it sells natural gas: thermal energy enterprises, industrial and household consumers.
In addition, the financial activities of Naftogaz are also influenced by the results of Gas Transmission System Operator of Ukraine (GTSOU), on which the dynamic payments of Mahistralni Gazoprovody Ukrainy (MGU) for the infrastructure transferred at the end of 2019 depend.
“The situation when a critical element of the infrastructure – GTSOU – incurs losses that are not replenished, for example, due to unauthorized selections or nonpayment for balancing services, is not normal,” Vitrenko said.
“Naftogaz has enormous problems associated with the fact that the entire industrial chain was financially unstable. Our task is precisely to make sure that, on the one hand, the entire market can develop financially sustainably, and on the other hand, Naftogaz is a financially stable company. which can increase production and really ensure, and not at the level of declarations, the country’s energy security,” he said.
Independent members of the supervisory board of NJSC Naftogaz Ukrainy resigned on Tuesday, a government source has told Interfax-Ukraine.
As reported, Naftogaz CEO Yuriy Vitrenko and independent members of the board were not able to to develop a constructive dialog. Prime Minister of Ukraine Denys Shmyhal on Monday evening met with independent members of the Naftogaz supervisory board, and on Tuesday morning, the members of the supervisory board talked with the company’s management board.
On September 7, the prime minister announced in his Telegram channel that the competition for the selection of four members of the supervisory board of Naftogaz Ukrainy will be announced within a week.
According to him, the competition should end in November this year so that the new supervisory board has enough time to determine the requirements for a candidate for the post of chairman of the Naftogaz board and hold a competition to select him no later than May 1 of next year.
The Cabinet of Ministers of Ukraine, by order No. 494-r dated May 19, 2021, elected three independent members of the Supervisory Board for a new term of up to one year: Clare Spottiswoode (Great Britain), Bruno Lescoeur (France) and Ludo Van der Heyden (Belgium), as well as two representatives of the state: Nataliya Boyko and Yulia Kovaliv.
In addition, the powers of a member of the Supervisory Board representing the state, Robert Bensch, were prematurely terminated, and Yulia Svyrydenko, Deputy Head of the Office of the President of Ukraine, replaced him.
