Page 63 - UKRRptDec22

9.2 Major corporate news 9.2.1 Oil & gas corporate news
Ukrainian Prime Minister Denis Shmygal has presented new Naftogaz Ukraine CEO Alexei Chernyshov to the oil and gas company's staff.
"We congratulate the newly appointed chairman of Naftogaz Ukraine's management board, Alexei Chernyshov, on his position. The new chairman faces important challenges: getting through the heating season; managing the combined heat-and-power plants that have been put under Naftogaz's management; accumulating gas throughout the whole heating season; increasing our own gas production; and providing financial resources for the company's stable operation," Shmygal said on his Telegram channel on Friday.
The prime minister noted that the company "is keeping gas production at a stable level, [and] a sufficient amount of gas has been accumulated in storage facilities to stably get through the heating season." Ukraine's Cabinet dismissed former Naftogaz CEO Yury Vitrenko on November 1 and appointed Chernyshov, a former regional development minister, to replace him on November 3. Vitrenko had headed the company since April 2021.
Naftogaz includes Ukraine's largest oil and gas producers (100% of Ukrgasvydobuvannya; 50% plus one share of Ukrnafta); has a monopoly on natural gas storage in underground storage facilities (100% of Ukrtransgaz) and oil transportation by pipeline through the country (100% of Ukrtransnafta); and is actively developing gas supplies to households
National Joint Stock Company “Naftogaz of Ukraine” published its consolidated financial statements for H1 2022, reviewed by independent international auditors. As specified in the statements, the Group’s operating and financial results, as well as general market volatility, were driven mainly by the all-out military invasion of Ukraine.
In the statements for H1 2022, separately financial results for Q2 show a profit for this period amounting to UAH 420M. However, total loss during the first half of the year amounted to UAH 57,159M, of which UAH 57,579M was from Q1.
The main factors contributing to Q1 losses were additional deductions for bad debt reserves associated with decreases in the solvency of the company’s counterparties, as a result of the beginning of the all-out war; and the negative difference between the purchase price of imported gas and its sales price in accordance with the public service obligations imposed on the company by the state, also caused by the beginning of the all-out war, and the compensation mechanism for these debts, which was not promulgated by the end of Q1.
Also a factor affecting the company’s Q1 loss was the destruction of company’s assets due to military shelling by the russian federation.
It is worth emphasising that starting from April, despite active military hostilities, the company managed to adapt to new circumstances for conducting its business and ensured profits of UAH 420M in Q2 2022. This was achieved, in particular, due to company cost reductions and the legislative regulation of compensation issues for the state-imposed public service
63 UKRAINE Country Report December 2022 www.intellinews.com