Naftohaz Ukrainy
Encyclopedia
Naftogaz is the national oil and gas company
of Ukraine. It is the state-owned company under the Ministry of Fuel and Energy
of Ukraine. The company is concerned with extraction, transportation, and refinement of natural gas
and crude oil. The company is also active in Egypt
and in the United Arab Emirates
. The head office of the company is in Kiev
.
Ukraine
's system of trunk natural gas
pipelines and underground natural gas depots is operated by Ukrtransgaz, a subsidiary of Naftogaz Ukrainy. Another subsidiary of Naftogaz Ukrainy, Gaz Ukrainy, is responsible for domestic gas distribution to local Ukrainian heat supply companies.
In September 2009 the Fitch Ratings
of the company dropped from 'CC' to 'C'. Late 2009 the company restructured of its foreign debt via the exchange of eurobond
s and obligations on bilateral loans for single investment instruments. Naftogaz transfers gas to Gazprom
.
over the natural gas prices with Russia
n state company Gazprom
, which was ended on 4 January 2006. In January 2009 the company was the center of a similar conflict.
On October 24, 2008, Gazprom
and Naftogas signed a long-term cooperation deal in which it was decided that Ukraine will receive Russian natural gas directly from Gazprom and Naftogas will be the sole importer of Russian natural gas.
Deliveries of 90 million cubic meters of natural gas per day, designed for Naftogas were fully cut by Gazprom on 1 January 2009 at 10:00 MSK and were restored only on 13 January 2009 at 10:00 MSK after long-term agreements for gas transit and supply for 2009-2019 were signed.
On March 4, 2009 Officers of the Security Service of Ukraine (SBU) and the Alfa special police unit searched the company's headquarters in a case against officials of Naftogaz Ukrainy on embezzlement of 6.3 billion cubic meters of transit natural gas
. The same day the Shevchenkivskyi
District Court of Kiev
banned the Security Service to investigate this case. The next day Bloc Yulia Tymoshenko deputies of the Ukrainian Parliament (Verkhovna Rada) prevented a second raid. According to Valerii Khoroshkovskyi, the first deputy chairman of the Security Service of Ukraine, the RosUkrEnergo
Company and a number of Verkhovna Rada’s deputies filed in a claim against Naftogaz Ukrainy. Also on March 5, 2009 Prime Minister
Yulia Tymoshenko
awarded the chairman of the State Customs Service Anatoliy Makarenko, deputy chief of the Energy Regional Customs department Taras Shepitko, deputy chief accountant of Naftogaz Ukrainy NJSC Maria Kushnyr and director of the Judicial Department of Naftogaz Ukrainy NJSC Sergiy Davydenko with decoration and honorary documents of the government of Ukraine
. On March 17, 2009 a criminal case was filed against officials of the Naftogaz Ukrainy national joint-stock company on suspicion of stealing 6.3 billion cubic meters of natural gas intended for transit through Ukraine by the SBU.
On March 30, 2010 an international arbitration
court in Stockholm
ordered Naftogaz Ukrainy to pay RosUkrEnergo around $200 million as a penalty for various breaches of supply, transit and storage contracts. On June 8, 2010 the Stockholm Arbitration Tribunal ordered Naftogaz to return 11 bcm of natural gas to RosUkrEnergo and that RosUkrEnergo would receive from Naftogaz a further 1.1 bcm of natural gas in lieu of RosUkrEnergo's entitlement to penalties for breach of contract. On August 16, 2009 Gazprom accused Naftogaz of lying stating that its leadership should not make out RosUkrEnergo and Gazprom one and the same entity. The official letter was signed by the Deputy Chairman of the Board Valery Golubev
who is also the Director of Operation for RosUkrEnergo.
(UAH) with a 19% level of payment late November 2009, debts for gas consumed in the previous heating season exceeded UAH 2.3 billion with a 74% level of payment.
Early December 2009 regional gas supplies companies complained the company did not have enough employees to work, and existing workers did not have experience of work in the natural gas sphere. At the time there was a transfer of gas networks to the Naftogaz Ukrainy daughter company Naftogaz Merezhi. Naftohaz immediately assured that it would meet all of its commitments to the consumers of natural gas and the workers of natural gas supply facilities.
On December 10, 2009 President of Ukraine
Victor Yushchenko stated: "NJSC Naftogaz Ukrainy is currently a company that does not formally exist, but it is in fact bankrupt" and that Prime Minister of Ukraine
Yulia Tymoshenko
was driving the company to bankruptcy so she could create a gas transportation consortium with Russia
.
. On December 13, 2006, Naftogaz Ukrainy and the Egyptian General Petroleum Corporation
had signed an agreement on the exploration and development of oil and gas deposits on the eastern territory of Alam El Shawish East in the Western Egyptian desert. On March 29, 2009 the company started to drill its first prospecting gas well Hamad-1 on the territory of the emirate of Al Fujairah in the United Arab Emirates
(UAE). The 2005 agreement with UAE investors was signed in 2005. The term of the agreement is 29 years, including the four years of prospecting.
National Oil Company
A national oil company is an oil company fully or in the majority owned by a national government. According to the United States Energy Information Administration, NOCs accounted for 52% global oil production and controlled 88% of proven oil reserves in 2007.Due to their increasing dominance over...
of Ukraine. It is the state-owned company under the Ministry of Fuel and Energy
Ministry of Fuel and Energy (Ukraine)
The Ministry of Fuel and Energy of Ukraine , in short Minpalyvenerho , is the main body in the system of central bodies of the executive power that provides realization of a state policy in electric power-generating, nuclear-industrial, and oil-gas complexes, often referred simply as the...
of Ukraine. The company is concerned with extraction, transportation, and refinement of natural gas
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...
and crude oil. The company is also active in Egypt
Egypt
Egypt , officially the Arab Republic of Egypt, Arabic: , is a country mainly in North Africa, with the Sinai Peninsula forming a land bridge in Southwest Asia. Egypt is thus a transcontinental country, and a major power in Africa, the Mediterranean Basin, the Middle East and the Muslim world...
and in the United Arab Emirates
United Arab Emirates
The United Arab Emirates, abbreviated as the UAE, or shortened to "the Emirates", is a state situated in the southeast of the Arabian Peninsula in Western Asia on the Persian Gulf, bordering Oman, and Saudi Arabia, and sharing sea borders with Iraq, Kuwait, Bahrain, Qatar, and Iran.The UAE is a...
. The head office of the company is in Kiev
Kiev
Kiev or Kyiv is the capital and the largest city of Ukraine, located in the north central part of the country on the Dnieper River. The population as of the 2001 census was 2,611,300. However, higher numbers have been cited in the press....
.
Ukraine
Ukraine
Ukraine is a country in Eastern Europe. It has an area of 603,628 km², making it the second largest contiguous country on the European continent, after Russia...
's system of trunk natural gas
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...
pipelines and underground natural gas depots is operated by Ukrtransgaz, a subsidiary of Naftogaz Ukrainy. Another subsidiary of Naftogaz Ukrainy, Gaz Ukrainy, is responsible for domestic gas distribution to local Ukrainian heat supply companies.
In September 2009 the Fitch Ratings
Fitch Ratings
The Fitch Group is a majority-owned subsidiary of FIMALAC, headquartered in Paris. Fitch Ratings, Fitch Solutions and Algorithmics, are part of the Fitch Group....
of the company dropped from 'CC' to 'C'. Late 2009 the company restructured of its foreign debt via the exchange of eurobond
Eurobond
A Eurobond is an international bond that is denominated in a currency not native to the country where it is issued. It can be categorised according to the currency in which it is issued. London is one of the centers of the Eurobond market, but Eurobonds may be traded throughout the world - for...
s and obligations on bilateral loans for single investment instruments. Naftogaz transfers gas to Gazprom
Gazprom
Open Joint Stock Company Gazprom is the largest extractor of natural gas in the world and the largest Russian company. Its headquarters are in Cheryomushki District, South-Western Administrative Okrug, Moscow...
.
Production and Refinery
- Subsidiary Company Ukrgasproduction
- Open Joint-Stock Company UkrnaftaUkrnaftaUkrnafta is a Ukrainian oil and natural gas extracting company, the largest producer of oil and gas in the country.The company produces around 3 million tonnes of oil and 4 billion m3 of natural gas per year, having oil proven reserves of nearly 180 million tonnes. Ukrnafta also ownes three natural...
(50% + 1) - Subsidiary Joint-Stock Company Chornomornaftogaz
- Overseas branches
Transportation
- Subsidiary Company Ukrtransgaz
- Open Joint-Stock Company Ukrtransnafta
- Subsidiary Joint-Stock Company Ukrspetstransgaz
Distribution
- Subsidiary Company Gas of Ukraine
- Subsidiary Ukravtogaz
- Heat power generating companies
- other enterprises
International
In 2005 the company became embroiled in a disputeRussia-Ukraine gas dispute
The Russia–Ukraine gas disputes refer to a number of disputes between Ukrainian oil and gas company Naftogaz Ukrainy and Russian gas supplier Gazprom over natural gas supplies, prices, and debts...
over the natural gas prices with Russia
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
n state company Gazprom
Gazprom
Open Joint Stock Company Gazprom is the largest extractor of natural gas in the world and the largest Russian company. Its headquarters are in Cheryomushki District, South-Western Administrative Okrug, Moscow...
, which was ended on 4 January 2006. In January 2009 the company was the center of a similar conflict.
On October 24, 2008, Gazprom
Gazprom
Open Joint Stock Company Gazprom is the largest extractor of natural gas in the world and the largest Russian company. Its headquarters are in Cheryomushki District, South-Western Administrative Okrug, Moscow...
and Naftogas signed a long-term cooperation deal in which it was decided that Ukraine will receive Russian natural gas directly from Gazprom and Naftogas will be the sole importer of Russian natural gas.
Deliveries of 90 million cubic meters of natural gas per day, designed for Naftogas were fully cut by Gazprom on 1 January 2009 at 10:00 MSK and were restored only on 13 January 2009 at 10:00 MSK after long-term agreements for gas transit and supply for 2009-2019 were signed.
On March 4, 2009 Officers of the Security Service of Ukraine (SBU) and the Alfa special police unit searched the company's headquarters in a case against officials of Naftogaz Ukrainy on embezzlement of 6.3 billion cubic meters of transit natural gas
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...
. The same day the Shevchenkivskyi
Shevchenkivskyi Raion
Shevchenkivskyi Raion is an administrative raion of the city of Kiev, the capital of Ukraine. It was established on April 4, 1937...
District Court of Kiev
Kiev
Kiev or Kyiv is the capital and the largest city of Ukraine, located in the north central part of the country on the Dnieper River. The population as of the 2001 census was 2,611,300. However, higher numbers have been cited in the press....
banned the Security Service to investigate this case. The next day Bloc Yulia Tymoshenko deputies of the Ukrainian Parliament (Verkhovna Rada) prevented a second raid. According to Valerii Khoroshkovskyi, the first deputy chairman of the Security Service of Ukraine, the RosUkrEnergo
RosUkrEnergo
RosUkrEnergo is a Swiss-registered venture company that transports natural gas from Turkmenistan to East European countries. 50% of the company is owned by Gazprom, through its daughter Swiss-registered Rosgas Holding A.G., and another 50% by Swiss-registered private company Centragas Holding A.G.,...
Company and a number of Verkhovna Rada’s deputies filed in a claim against Naftogaz Ukrainy. Also on March 5, 2009 Prime Minister
Prime Minister of Ukraine
The Prime Minister of Ukraine is Ukraine's head of government presiding over the Cabinet of Ministers of Ukraine, which is the highest body of the executive branch of the Ukrainian government....
Yulia Tymoshenko
Yulia Tymoshenko
Yulia Volodymyrivna Tymoshenko , née Grigyan , born 27 November 1960, is a Ukrainian politician. She was the Prime Minister of Ukraine from 24 January to 8 September 2005, and again from 18 December 2007 to 4 March 2010. She placed third in Forbes Magazine's List of The World's 100 Most Powerful...
awarded the chairman of the State Customs Service Anatoliy Makarenko, deputy chief of the Energy Regional Customs department Taras Shepitko, deputy chief accountant of Naftogaz Ukrainy NJSC Maria Kushnyr and director of the Judicial Department of Naftogaz Ukrainy NJSC Sergiy Davydenko with decoration and honorary documents of the government of Ukraine
Government of Ukraine
Government of Ukraine is often associated with the Cabinet of Ministers of Ukraine. However it should be considered that Ukraine is a country under a semi-presidential system with separate legislative, executive, and judicial branches of government...
. On March 17, 2009 a criminal case was filed against officials of the Naftogaz Ukrainy national joint-stock company on suspicion of stealing 6.3 billion cubic meters of natural gas intended for transit through Ukraine by the SBU.
On March 30, 2010 an international arbitration
International arbitration
International arbitration is a leading method for resolving disputes arising from international commercial agreements and other international relationships...
court in Stockholm
Stockholm
Stockholm is the capital and the largest city of Sweden and constitutes the most populated urban area in Scandinavia. Stockholm is the most populous city in Sweden, with a population of 851,155 in the municipality , 1.37 million in the urban area , and around 2.1 million in the metropolitan area...
ordered Naftogaz Ukrainy to pay RosUkrEnergo around $200 million as a penalty for various breaches of supply, transit and storage contracts. On June 8, 2010 the Stockholm Arbitration Tribunal ordered Naftogaz to return 11 bcm of natural gas to RosUkrEnergo and that RosUkrEnergo would receive from Naftogaz a further 1.1 bcm of natural gas in lieu of RosUkrEnergo's entitlement to penalties for breach of contract. On August 16, 2009 Gazprom accused Naftogaz of lying stating that its leadership should not make out RosUkrEnergo and Gazprom one and the same entity. The official letter was signed by the Deputy Chairman of the Board Valery Golubev
Valery Golubev
Valery Aleksandrovich Golubev , former Soviet Union) is a Russian politician and businessman. He is a former Head of the Vasileostrovsky Administrative District of St. Petersburg, former member of the Federation Council of Russia, currently a Deputy CEO Gazprom and the Head of its Department for...
who is also the Director of Operation for RosUkrEnergo.
Domestic
The debt of municipal heat supplying companies to the company for gas consumed since the start of the 2009 heating season (from October 1, 2009) had exceeded 927 million Ukrainian hryvniaUkrainian hryvnia
The hryvnia, sometimes hryvnya or grivna ; sign: ₴, code: , has been the national currency of Ukraine since September 2, 1996. The hryvnia is subdivided into 100 kopiyok. In medieval times, it was a currency of Kievan Rus'....
(UAH) with a 19% level of payment late November 2009, debts for gas consumed in the previous heating season exceeded UAH 2.3 billion with a 74% level of payment.
Early December 2009 regional gas supplies companies complained the company did not have enough employees to work, and existing workers did not have experience of work in the natural gas sphere. At the time there was a transfer of gas networks to the Naftogaz Ukrainy daughter company Naftogaz Merezhi. Naftohaz immediately assured that it would meet all of its commitments to the consumers of natural gas and the workers of natural gas supply facilities.
On December 10, 2009 President of Ukraine
President of Ukraine
Prior to the formation of the modern Ukrainian presidency, the previous Ukrainian head of state office was officially established in exile by Andriy Livytskyi. At first the de facto leader of nation was the president of the Central Rada at early years of the Ukrainian People's Republic, while the...
Victor Yushchenko stated: "NJSC Naftogaz Ukrainy is currently a company that does not formally exist, but it is in fact bankrupt" and that Prime Minister of Ukraine
Prime Minister of Ukraine
The Prime Minister of Ukraine is Ukraine's head of government presiding over the Cabinet of Ministers of Ukraine, which is the highest body of the executive branch of the Ukrainian government....
Yulia Tymoshenko
Yulia Tymoshenko
Yulia Volodymyrivna Tymoshenko , née Grigyan , born 27 November 1960, is a Ukrainian politician. She was the Prime Minister of Ukraine from 24 January to 8 September 2005, and again from 18 December 2007 to 4 March 2010. She placed third in Forbes Magazine's List of The World's 100 Most Powerful...
was driving the company to bankruptcy so she could create a gas transportation consortium with Russia
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
.
International activities
The company drills for oil in the Western Desert in EgyptEgypt
Egypt , officially the Arab Republic of Egypt, Arabic: , is a country mainly in North Africa, with the Sinai Peninsula forming a land bridge in Southwest Asia. Egypt is thus a transcontinental country, and a major power in Africa, the Mediterranean Basin, the Middle East and the Muslim world...
. On December 13, 2006, Naftogaz Ukrainy and the Egyptian General Petroleum Corporation
Egyptian General Petroleum Corporation
The Egyptian General Petroleum Corporation is a national oil company of Egypt. It owns 70% of shares in the Egyptian Natural Gas Company, as well as a 75% stake in the petroleum-industry support airline Petroleum Air Services .It own a stake in the East Mediterranean Gas Company....
had signed an agreement on the exploration and development of oil and gas deposits on the eastern territory of Alam El Shawish East in the Western Egyptian desert. On March 29, 2009 the company started to drill its first prospecting gas well Hamad-1 on the territory of the emirate of Al Fujairah in the United Arab Emirates
United Arab Emirates
The United Arab Emirates, abbreviated as the UAE, or shortened to "the Emirates", is a state situated in the southeast of the Arabian Peninsula in Western Asia on the Persian Gulf, bordering Oman, and Saudi Arabia, and sharing sea borders with Iraq, Kuwait, Bahrain, Qatar, and Iran.The UAE is a...
(UAE). The 2005 agreement with UAE investors was signed in 2005. The term of the agreement is 29 years, including the four years of prospecting.
External links
- Official website of Naftogas Ukrainy/ Official website of Naftogas Ukrainy
- Official website of Ministry of Fuel and Energy of Ukraine
- Офшор допоможе "Нафтогазу" реструктурувати борги (Асоціація «Газові трейдери України»)
- "Нафтогаз" реструктурує борги через офшор? (Економічна правда, 28.07.2009)
- Асоціація «Газові трейдери України»