The gas war between Ukraine’s national monopolist Naftogaz and the Russian behemoth Gazprom is rushing towards a climax. Last December Naftogaz won a historic $2.6bn award from Gazprom after the Stockholm arbitration court, but Gazprom refused to pay and now the Ukranian energy company is trying to recover the money by seizing assets.
But the showdown between the two corporate giants will crescendo in at the end of this year when Russia’s Nord Stream 2 pipeline comes online that will allow Gazprom to cut Ukraine out of the delivery loop entirely. Naftogaz base case scenario is Russia will stop sending any gas through the Ukrainian pipelines even if Nord Stream 2 is not ready. Both companies are building up reserves in preparation.
At home Naftogaz is fighting another set of battles. The company is in profit and the biggest tax payer to the government, but it is in the midst of reforming the energy sector, which remains for the moment uninvestable. Moreover a nasty fight has broken out between Ukrainian Prime Minister Volodymyr Groysman and Naftogaz’s CEO Andriy Kobolev.
bne IntelliNews editor-in-chief Ben Aris talks to Naftogaz’s executive director Yuriy Vitrenko about these and other issues.
Ben Aris, editor-in-chief, bne IntelliNews
Yuriy Vitrenko, Executive director Naftogaz