Page 71 - UKRRptOct21

9.2 Major corporate news 9.2.1 Oil & gas corporate news
Cabinet of Ministers dismissed two executive board members of Naftogaz and appointed four members to vacant positions on September 27, rbc.ua news site reported.
This became possible after the Cabinet dismissed all the members of the company’s supervisory board and, as the sole shareholder, assumed the authority of the board. Last week, the supervisory board dismissed two executive board members, COO Otto Waterlander and CFO Petrus van Driel, according to Interfax-Ukraine. In this way, the Naftogaz executive board has been fully reshuffled and only CEO Yuriy Vitrenko has retained his position.
Recall, three independent members of Naftogaz supervisory board announced their resignation on September 7, so they had two weeks to conclude their responsibilities in the board. With their exit, the board has lost its quorum and became dysfunctional.
In other news, CEO Vitrenko has sent a letter to PM Denys Shmyhal estimating Naftogaz’ extraordinary expenditures and working capital needs at UAH123bn ($4.6bn) in the short-term, rbc.ua news site reported on September 24. They include UAH17.5bn for the import of 0.9 bcm of natural gas, UAH33.7bn extra gas production royalty (the royalty is tied to the price of imported gas), UAH53.2bn in extra working capital needs related to gas supply to heating and gas distribution companies, UAH10bn extra tax expenditures related to the division of Ukrnafta assets and other extra costs of UAH8.9bn. The company offers to cover the deficit with a UAH51.2bn payment from the operators of the gas transit system and the rest with money to be received from the implementation of a special law on debt settlement on the gas market, including budget outlays of UAH33.7bn and UAH10bn, which are expected collections by the government of extra taxes/royalties from Naftogaz.
According to Vitrenko’s letter, Naftogaz had UAH57.7bn cash as of May 1, which has been fully spent for stockpiling natural gas (including 2.1 bcm of imported gas for UAH27bn).
The Cabinet of Ministers of Ukraine has allowed the chairman of the board of NJSC Naftogaz Ukrainy to appoint and dismiss employees of the company without the consent of the supervisory board. The corresponding decision is enshrined in resolution No. 1187-r of Sept. 29, the text of which has been posted on the government portal.
In face of record high EU gas prices, Ukraine’s gas players signed a memorandum September 30 freezing domestic heat and hot water rates through the coming winter. “We are signing a memorandum according to which tariffs for heat, tariffs for hot water for the population will not increase until the end of the heating season,” President Zelenskiy said. “I think this is a great victory.” The accord was signed by Prime Minister Shmygal, Naftogaz CEO Yuriy Vitrenko, Energy Minister German Galushchenko, and by big city
71 UKRAINE Country Report October 2021 www.intellinews.com