Experts, the Government and the Parliament Discussed the Future of Naftogaz

22 April 2016

The first meeting of the Supervisory Board of Naftogaz of Ukraine NJSC was schedules for early May. This was announced by Yuliia Kovaliv, Deputy Minister of Economic Development and Trade, on the Energy Day within the framework of the Structural Reforms Week organized by Kakha Bendukidze Free Market Centre.

“Naftogaz’s Supervisory Board will be created by the end of this week and we’re expecting that its first meeting will take place on May 10–11. This is an important step in reforming the company’s corporate management”, she said.

According to Andrii Koboliev, the Chairman of the Board of Naftogaz of Ukraine NJSC, there are two strategic objectives at the moment — maintain the gas transit and create a competitive gas market. “Gas transit brings USD 2 billion to the state budget annually, but we may lose this money because of Russia’s Nord Stream 2 project”, he said. According to Mr. Koboliev, construction of the Nord Stream 2 is the reason why Ukraine shouldn’t delay the restructuring of Naftogaz. “We don’t have much time left. Russia has already ordered pipes for its Nord Stream”, Mr. Koboliev added.

There are two models of Naftogaz restructuring at the moment proposed by the Ministry of Energy and Coal Industry and Naftogaz itself. According to Olena Pavlenko, President of DiXi Group think tank, both models are compliant with the EU legislation. “The key differences have to do with the question who will control the transmission system operator, storage facilities and Ukrgazvydobuvannia”, said the expert.

The Ministry of Energy and Coal Industry was represented by Mykhailo Bno-Airian, Head of the Ministry’s European Integration Department. “Naftogaz NJSC is a strong monopoly. Our Ministry’s task is to demonopolize the fuel market”, he said. According to him, the Ministry is going to leave Naftogaz its supply and trading functions only. 


In the opinion of Oleh Prokhorenko, Chairman of the Board of Ukrgazvydobuvannia PJSC, Naftogaz of Ukraine NJSC must be managed by a corporate management body, not the Ministry. “Corporate management body is the world’s best invention. To run a company is not a competence of the Ministry”, he said.

Apart from Naftogaz restructuring, on the Energy Day within the framework of the Structural Reforms Week stakeholders discussed the future of the coal industry and problems in the hydrocarbon sector. The following days of the Week will be focused on privatization of state-owned property and reform of judicial and law-enforcement authorities. 

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