Naftohaz Ukrayiny Rejects Deputy Premier’s Accusations

The intentions of Ihor Bakai, chairman of the Naftohaz Ukrayiny National Joint Stock Company, who addressed a press conference on the Monday before last, were absolutely transparent: to repel the attack of Deputy Prime Minister Yuliya Tymoshenko who directly linked the inflated Ukrainian natural gas debts to shortcomings in the work of the entity he heads.

Thus Mr. Bakai passed over some signed documents in the possession of journalists, including those containing commercial secrets, which testified that Naftohaz was not running up such huge debts ($2.2 billion). Mr. Bakai claimed Naftohaz owed only $740 million to the Russian Gazprom, and he did not hold himself responsible for other companies and the rescheduled debts of past years.

In the course of the press conference grandiloquently billed as The Present State of Ukraine’s Oil and Gas Complex, the CEO, who had been urgently called back from his foreign vacation, told the press about the over- fulfillment of all oil and gas plans and targets. This is why he felt so reassured. In addition, he boldly blamed the former government for the losses inflicted on Naftohaz (UAH 5.5 million) by ill-conceived decisions and equally resolutely supported the Viktor Yushchenko government and its 100 and 1000 Days programs.

But the Naftohaz chairman did not support Ms. Tymoshenko’s proposal to declare a state of emergency in energy. He agrees with Mr. Yushchenko that there is a crisis of payments, not of energy, in Ukraine. Moreover, Mr. Bakai claimed to have invented what he considers a better way to forestall Naftohaz gas debts in the future. If the government, Mr. Bakai reasons, does not force his company to purchase so-called commercial gas (about 25 billion cubic meters), Naftohaz will not only have no debts this year but will also be able to return an annual $100 million to Russia at the expense of its profits.

Mr. Bakai does not want to enter into a head-on dispute with the deputy premier, for he would like to see her in office as long as possible, but he noted that Ms. Tymoshenko had not worked in the gas market for three years and has not yet found her bearings. However, respect for the high official still did not prevent Mr. Bakai from characterizing as ill-advised the deal Ms. Tymoshenko struck in Moscow on the purchase of 25-30 billion cubic meters of gas, saying the price of $40/1000 cubic meters was too high.