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42 I Eastern Europe bne April 2018
INTERVIEW: Naftogaz’s fragile success Fabrice Deprez in Kyiv
Reforming Ukraine’s state-owned gas company is like doing sur- gery, Yuri Vitrenko argues.
The commercial director of Naftogaz has a thing for medical analogies, comparing the company to a human body and say- ing his goal is to turn it into a “healthy, fit person”. But he’s also careful not to oversell the company’s achievements in the last three years: “We’ve stopped the bleeding, we’re out of emergency care, but there still is a lot of rehabilitation to do” he tells bne IntelliNews in an exclu- sive interview in Kyiv.
Naftogaz found itself in the middle of yet another gas war with the Russian gas monopolist Gazprom on March
2. Naftogaz has just won a years-long arbitration decision in Stockholm and
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the Russian gas giant is supposed to pay $2.56bn in compensation for overcharg- ing for gas and underpaying for gas transit through Ukraine to its Western customers. Gazprom looks like it will refuse to pay and threatened to break
Ukraine has been the revolutionary change at the company. Gas subsides used to account for 8% of GDP and the company’s debt weighed heavily on the budget. But at the International Monetary Fund (IMF) insistence, the
“We’ve stopped the bleeding, we’re out of emergency care, but there still is a lot of rehabilitation to do”
its supply and transit agreement with Ukraine the next day.
Dealing with an irate Russia is part of the company’s brief and catches the headlines, but more importantly for
company has been through a dramatic transformation: tariffs have been hiked and today the $3.8bn Naftogaz paid to the state budget in the form of taxes and dividends makes it the biggest taxpayer in the country. It is now moving on to