Translated material
We will do without intermediaries
Dmitry Medvedev spoke in favor of revising the gas supply scheme to Ukraine
First Deputy Prime Minister and Chairman of the Board of Directors of Gazprom Dmitry Medvedev spoke out against gas intermediaries. “We will probably reconsider the relationship scheme next year and move away from the existence of any intermediary structures that are not fully understood . In any case, structures, the presence of which is not entirely explainable to us today and which were proposed in a certain historical context by our partners. Maybe this will simplify the relationship, help them pay on time without creating such large debts,” he said in an interview with the German television company ARD. In fact, this means that the Kremlin is ready to get rid of the Swiss trader RosUkrEnergo, which is the exclusive supplier of Central Asian gas to the Ukrainian market.It is unlikely that such a decisive statement, which could cost certain people a business with a turnover of billions of dollars a year, was not approved by Mr. Medvedev by the president of the country. Moreover, his statement largely coincides with the gas platform of the likely Prime Minister of Ukraine and political opponent of the Kremlin, Yulia Tymoshenko. She promised to get rid of intermediaries and build direct relations with Russia in the field of gas supplies.
Nevertheless, Moscow’s readiness to take such a step has matured despite the logic of building relations with the future government of Ukraine. In the sense that no one was going to make friendly gestures towards Ms. Tymoshenko. It’s just that relations with RosUkrEnergo’s partner, Ukrainian entrepreneur Dmitry Firtash, seem to have finally reached a dead end. And Mr. Medvedev, even before, when it was not officially known about Mr. Firtash’s participation in the capital of RUE, spoke out in favor of Naftogaz of Ukraine becoming the second shareholder of the trader, along with Gazprom. And the fact that it was the chairman of the board of directors of the Russian monopoly who put the idea of getting rid of intermediaries on air looks quite logical.
A scheme with an intermediary always raises suspicions about the withdrawal of money from the parent company. Answering a question from a German journalist that, according to some analysts, certain amounts of money are disappearing from Gazprom, Dmitry Medvedev turned the conversation to intermediary structures. “I will tell these analysts that they are wrong. No amount of money disappears from Gazprom. “Gazprom is an absolutely open joint-stock company, with public reporting that is audited by international companies,” he noted. - This is all speculation and talk. But where the amounts sometimes disappear or, in any case, somehow dissolve, is with a number of our partners with whom we cooperate in the gas sector. And we periodically have to deal with our colleagues regarding the occurrence of certain debts.”
An official representative of RUE told Vremya Novostei that the company continues to work in full compliance with long-term contracts that were concluded both with the gas supplier (Gazprom group - Ed. ) and with gas buyers in Ukraine and European countries.
As is known, according to an agreement between Gazprom, Naftogaz and RUE dated January 4, 2006, the Swiss trader received the status of an exclusive supplier of imported gas to Ukraine. Gazprom buys the necessary volumes of gas in Central Asia, sells them with a symbolic markup to RUE (50% belongs to Gazprom, 45% to Dmitry Firtash, 5% to Ivan Fursin), and the trader resells them on the Russian-Ukrainian border. Last year, RUE's turnover exceeded $10 billion, and its net profit was $750 million. Dividends have not yet been paid.
As is known, Mr. Firtash previously had serious problems with business development in Russia. And they began with his attempt to gain control of large gas reserves in the Astrakhan region (Astrakhan Oil and Gas Company) and the Nenets Autonomous Okrug (Pechoraneftegazprom). Moreover, the order not to let him into these assets came from the highest level, and for helping organize transactions, all positions in Gazprom were lost by the deputy chairman of the board and head of Gazprom Neft, Alexander Ryazanov (who was also responsible for the activities of RUE).
Mr. Medvedev's statements seem to be the starting point for building a long-term pricing policy in relation to Ukraine. “On the contrary, we have done everything possible over the past two years to ensure that pricing among our partners in the Commonwealth of Independent States, the Baltic countries, and other states is based on one universal principle - based on the existing system for determining gas prices , said the First Deputy Prime Minister. - This process is, of course, unambiguous for us. We will see it through to the end, even though it causes some dissatisfaction among our partners. But they are simply accustomed to paying non-market prices, non-market tariffs. But that’s impossible.” According to him, the price of gas is currently calculated in accordance with internationally proven methods.
The day before, this idea was also voiced by the deputy chairman of the board of Gazprom, Valery Golubev, who outlined the position of the Russian concern regarding gas prices for Ukraine in the coming years. “In Ukraine, this work (work on the transition to gas price formulas - Ed.) will have to be done this year. There is a scheme of contracts, there is an understanding among Ukrainian colleagues that, of course, we must move in this direction. There is a fundamental agreement that it is necessary to determine a transition formula,” ITAR-TASS quotes him. The top manager noted that “the dynamics of the transition are important.” “It is clear that the Ukrainian economy cannot immediately move to the European price level, even due to its proximity to Russian suppliers. But this transition until 2011 may take place along different trajectories. Accordingly, the price may be different for 2008, 2009, 2010. This is a subject for negotiations,” says Mr. Golubev. In his opinion, it would be fair for the price of gas to increase “in equal proportions every year - 19-20%.” “Thus, by 2011, the price of gas will be determined for Ukraine as a sovereign, self-sufficient European state,” summed up the deputy chairman of the board.
Meanwhile, in Kyiv yesterday they released information about how the overdue debt for gas supplied to Gazprom will be paid off. It turned out that most of the $929 million in debt will go to Naftogaz of Ukraine from Gazprom as an advance payment for transit services. In this case, the amount will immediately be returned to the Russian concern as a debt in transit through gas intermediaries - Ukrgazenergo and RosUkrEnergo. Naftogaz will have to raise about another $200 million as loans. As a result, by the time the new government headed by Yulia Tymoshenko is formed, the Ukrainian oil and gas giant will find itself in an ambiguous financial position. On the one hand, there is a hole in the budget associated with the loss of a quarter of revenues from gas transit, on the other hand, there is “failing” receivables from regional utility companies, which will be very difficult from a political point of view to clear out during the heating season. Gazprom is guaranteed to receive the debt. You just need to have time to “scroll” this money before Mrs. Tymoshenko comes to power. That is why the deadline for completing settlements was set at October 31.
The “secret” of the source of funds to pay off Naftogaz’s debt was revealed yesterday by Deputy Secretary of the National Security and Defense Council (NSDC) Yuriy Prodan at a briefing. “Naftogaz of Ukraine will pay off the debt for imported gas through an advance payment of $500 million for services for the transit of Russian natural gas, which will be provided in the fourth quarter of 2007, as well as by attracting credit resources,” he said. According to him, the Minister of Fuel and Energy of Ukraine Yuriy Boyko, who agreed on the repayment scheme (but the documents were signed at the level of economic entities), had previously assured the National Security and Defense Council that Naftogaz of Ukraine, in the event of receiving an advance payment for gas transit from the Russian Gazprom and attraction of credit funds will be financially balanced by the end of this year. Although even without close study it is clear that at the end of the year the company will have a significant deficit of funds.
According to the five-year contract for gas transit through the territory of Ukraine, Gazprom is obliged to transport at least 110 billion cubic meters per year through Naftogaz networks to Europe. In turn, the Ukrainian side is obliged to provide transit at a fixed rate of $1.6 per thousand cubic meters per 100 km. With an average length of the transport route of about 1000 km, the cost of transporting a thousand cubic meters costs Gazprom $16. According to statistics, in the nine months of 2007, 80 billion cubic meters of gas passed through the Naftogaz system to Europe. That is, in the last quarter, the Russian monopolist is obliged to pump at least 30 billion cubic meters worth at least $480 million. Naftogaz will attract another $200 million needed to pay off the debt as loans.
Immediately after the results of the elections to the Verkhovna Rada appeared, according to which the right to form a government was to be given to the alliance of the Yulia Tymoshenko Bloc and the pro-presidential Our Ukraine, Gazprom announced that the Ukrainian side had debts for gas supplied in excess of $1.3 billion. Subsequently, it turned out that Ukrgazenergo (a joint venture between the Swiss trader RosUkrEnergo and Naftogaz of Ukraine), which is the exclusive importer of gas to Ukraine, owed its supplier RUE $1.029 billion. And he, in turn, delayed payments to Gazprom.
During settlement negotiations, it was established that two-thirds of the debt was due to chronic non-payments by Naftogaz Ukraine. And after intensive consultations, it was decided that Ukrgazenergo would return $300 million (which were on its conscience) by October 22. And the first $100 million came even before the documents on the settlement schedule were signed. And Naftogaz will return the money by the end of the month through an advance from Gazprom.
The State Oil Company of Azerbaijan (SOCAR) plans to continue gas supplies to Georgia until the end of this year, said company president Rovnag Abdullayev. “We are currently continuing gas supplies to Georgia, and are now negotiating with the Georgian side to find opportunities to continue these supplies until the end of this year. In addition, we are also considering the possibility of supplying gas to Georgia in 2008 after we determine the fuel and energy balance of Azerbaijan for the next year and fully supply our country with gas,” Mr. Abdullayev said. According to him, the price of Azerbaijani gas for Georgia in 2008 will differ from the price of supplies this year. It was previously reported that from October 11-12, supplies of Azerbaijani gas to Georgia will be suspended and resumed only after an appropriate agreement between the governments of the two countries. Interfax