NJSC Naftogaz Ukrainy has appointed Oleksandr Scherba as head of its Swiss subsidiary, Naftogaz Trading Europe S.A., instead of Willem Coppoolse.
The relevant notice was published in the Swiss press in early February.
Scherba, who served as Ambassador Extraordinary and Plenipotentiary of Ukraine to Austria from November 2014 to April 2021, joined Naftogaz in October last year as Chief Adviser to the CEO on international activities’ coordination.
Coppoolse completed his work at Naftogaz back in May 2021, where he was responsible for the trading direction, and since January 2022 he has been appointed director of the Energy Resources of Ukraine (ERU) group of companies.
As reported, Naftogaz resumed imports of natural gas in early February 2022.
Naftogaz Ukrainy unites the largest oil and gas producing enterprises of the country (100% of Ukrgazvydobuvannia and 50% plus 1 share of PJSC Ukrnafta). The Group also has a monopoly on natural gas storage in underground storage facilities (100% of Ukrtransgaz) and oil transportation by pipeline across the country (100% of Ukrtransnafta), and is actively developing gas supplies to household consumers.
NJSC Naftogaz Ukrainy in a letter sent to the government at the beginning of this year warned of the risks of balancing the gas transmission system (GTS) of Ukraine in the current heating season, which, according to the company, are associated with the problems of forming sufficient natural gas resources for these purposes by Gas Transmission System Operator Ukraine (GTSOU).
In a copy of the document available to the Interfax-Ukraine agency, Naftogaz notes that, according to the law on the natural gas market, GTSOU must purchase gas for these purposes “in a non-discriminatory and transparent manner and on market conditions.”
It notes that the current legislation in no way imposes on the participants in the natural gas market, in particular on Naftogaz, the obligation to provide the balancing service to GTSOU.
According to Naftogaz, GTSOU did not provide, as provided for by European rules, the possibility of trading gas for the needs of balancing the system on liquid exchanges or on its own trading platform.
Naftogaz recalled that the contract between GTSOU and the subsidiary of Naftogaz, Naftogaz Trading gas supply company LLC, on the provision of balancing services by the latter expires on January 19, 2022, and a new similar tender in December 2021 failed due to insufficient interest from market participants in the conditions proposed by GTSOU.
Naftogaz informs that it does not see an opportunity to participate in a new tender for the purchase of balancing services by GTSOU for 2022. According to Naftogaz, the GTS operator, by purchasing the balancing service from Naftogaz, actually resells it to gas market entities (primarily Naftogaz) and receives super profits.
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.
