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ENERGY TECH
Ukraine minister: Naftogaz debt to Gazprom to be resolved Monday
by Staff Writers
Kiev, Ukraine (UPI) Nov 4, 2013


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A dispute over late payment of $882 million owed by Ukraine's Naftogaz to Russia's Gazprom will be resolved Monday, a Ukrainian minister said.

Minister of Energy and Mines Eduard Stavytskyy told Ukrainian broadcaster Channel 5 Saturday during a soccer game between ministers and members of Parliament the problem of debts for Russian gas will be hammered out Monday.

He said the talks between Naftogaz and Gazprom are in the the final stages, but wouldn't reveal the nature of any of the negotiations, or if the government will step in to provide financial help for the Ukrainian company.

"I want to emphasize that the issue is actually solved and on Monday you will learn the details," Stavytskyy said.

He said last week he had given the two energy companies until Thursday to come to an agreement on the debt, but that deadline was pushed back until Monday.

"The main thing is that this issue has to be removed from the agenda, that it has to be resolved ... . It depends on how the talks go," he said.

The late payment for imported gas supplies has caused consternation on the part of the Russian suppliers.

Valery Golubev, Gazprom's deputy chief executive, threatened Wednesday that Naftogaz could face demands for prepayment for Russian gas supplies beginning as early as December if the situation isn't resolved soon, Radio Ukraine reported.

"They have said they may pay the debt," Golubev said. "They simply can't afford to switch to advance payment. It will be easier for them to find the money. That's my opinion."

Gazprom's right to demand advance payment is part of its contract with Nafotgaz, he said.

"If they don't actually make repayment soon -- and all the deadlines have come and gone -- it may turn out that, not having made advance payment for November, by Dec. 1 they will wind up in a situation where this contract provision takes effect," Golubev said. "We don't want these extreme measures and it would be extremely difficult for Ukraine, too. So, most likely, the government will help Naftogaz."

Ukrainian Prime Minister Mykola Azarov hinted Tuesday his government may not be willing to come to rescue for Naftogaz. He said while the issue of the natural gas debt with Russia remains "within the Ukrainian government's focus," it was primarily a problem of two companies, adding that while "certain problems exist ... they can hardly be called critical."

That prompted the warnings both from Golubev and Gazprom Chief Executive Alexei Miller, as well as from Russian Prime Minister Dmitry Medvedev, that demands for prepayment could be instituted.

Naftogaz has blamed the government for the late payment to Gazprom.

Deputy board Chairman Vadim Chuprun said last week Naftogaz hasn't received an expected $1.33 billion from the state budget to compensate it for the difference in rates between imported Russian gas and the price charged to to Ukrainian consumers, leading to a shortfall of $882 million, RIA Novosti reported.

Chuprun said Ukraine's energy ministry had drawn up amendments to the state budget to compensate Naftogaz for the $1.33 billion difference, but that the country's finance ministry didn't support the measures.

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