Naftogaz of Ukraine Expecting Billions in Compensation from Gazprom

Ukrainian Naftogaz hopes to receive billions in compensation following the results of the arbitration of Stockholm lawsuits against Gazprom, says the commercial director of Naftogaz, Yuri Vitrenko.

In his opinion, the Stockholm Arbitration will not decide that the Ukrainian side should pay compensation to the Russian side.

"We’ve already made our calculations…but to say anything concrete at this time is difficult. However, we expect Gazprom will pay us a very significant amount. It's about billions of dollars, if not more than ten billion. We do not expect that, as a result of this process, if we take both the sale and the lawsuit on transit, we will be forced to pay something to Gazprom," Vitrenko said, adding that the Ukrainian gas holding expects to provide services for the transit of Russian "blue fuel" by the end of 2019.

Regarding the fulfilment of the contract on gas supplies after the court decision in Stockholm, Vitrenko stated that while the Ukrainian side "does not yet know whether it will buy Russian gas or have such a duty, it does not expect to make any new agreements with the Russians".

Naftogaz of Ukraine and Gazprom have been unable to reach a compromise on a number of claims and lawsuits in the Stockholm Arbitration.

The parties have been trying to figure out their relationship since the summer of 2014, constantly increasing the number of claims against each other, bringing them to absurd tens of billions. Gazprom, in particular, demanded that Naftogaz pay fines for the shortage of Russian "blue fuel", and the Ukrainian side insisted on concluding an additional agreement on the contract.

At the end of May, when the preliminary verdict of Stockholm Arbitration on the counterclaims of Russian and Ukrainian state-owned companies was made public, the Ukrainian party celebrated the victory and stated that the "take or pay" rule had been canceled by the court decision, back-dating to 2014.

However, then Gazprom refuted the announcement, with Deputy Chairman of the Board of the Russian gas concern, Alexander Medvedev, claiming the preliminary court decision contains no such statement.

In turn, the Chairman himself, Alexei Miller, said at a press conference following the company's annual shareholders meeting, that Gazprom would appeal the interim verdict of the Stockholm Arbitration.

Dimitri Dolaberidze

16 October 2017 20:09