Naftogaz of Ukraine ( uk, НАК "Нафтогаз України", ''Naftogaz Ukrayiny''; literally "Petro-Gas of Ukraine") is the largest
national oil and gas company of
Ukraine
Ukraine ( uk, Україна, Ukraïna, ) is a country in Eastern Europe. It is the second-largest European country after Russia, which it borders to the east and northeast. Ukraine covers approximately . Prior to the ongoing Russian inv ...
. It is a state-owned company
[Ukraine sets gas offer but wants no middleman](_blank)
Reuters
Reuters ( ) is a news agency owned by Thomson Reuters Corporation. It employs around 2,500 journalists and 600 photojournalists in about 200 locations worldwide. Reuters is one of the largest news agencies in the world.
The agency was esta ...
(7-1-2009) subordinated to the
Government of Ukraine. The
vertical-integrated company carries out a complete cycle of exploration operations and development of deposits, operating and exploratory drilling, extraction, transportation, and refinement of
natural gas
Natural gas (also called fossil gas or simply gas) is a naturally occurring mixture of gaseous hydrocarbons consisting primarily of methane in addition to various smaller amounts of other higher alkanes. Low levels of trace gases like carbo ...
and
crude oil, supply of natural and liquefied gas to consumers.
Ukraine
Ukraine ( uk, Україна, Ukraïna, ) is a country in Eastern Europe. It is the second-largest European country after Russia, which it borders to the east and northeast. Ukraine covers approximately . Prior to the ongoing Russian inv ...
's system of trunk
natural gas
Natural gas (also called fossil gas or simply gas) is a naturally occurring mixture of gaseous hydrocarbons consisting primarily of methane in addition to various smaller amounts of other higher alkanes. Low levels of trace gases like carbo ...
pipelines and underground natural gas depots is operated by Ukrtransgaz, a subsidiary of Naftogaz. As of 2009, the company had 38,200 km of high pressure gas transit pipelines and more than 30 billion cubic meters of gas storage capacity. This major gas infrastructure located between Russia and the European Union has led the company to feature prominently in regional politics. Another subsidiary of Naftogaz, Gas of Ukraine, is responsible for domestic gas distribution to the local
district heating
District heating (also known as heat networks or teleheating) is a system for distributing heat generated in a centralized location through a system of insulated pipes for residential and commercial heating requirements such as space heating a ...
companies.
Naftogaz is a major Ukrainian employer with 68,386 employees (as of 2018). The former
PwC management consultant
Andriy Kobolyev
Andríy Kóbolyev (; born August 16, 1978) is a Ukrainian politician and businessman, former chief executive officer of Ukrainian largest national oil and gas company Naftogaz.
From 2020 Andriy Kobolyev has been a member of the supervisory board ...
took over as CEO after the
2014 Ukrainian revolution tasked with reducing the country's dependence on Russian gas and reforming the company's business practices.
The group is the largest
taxpayer
A taxpayer is a person or organization (such as a company) subject to pay a tax. Modern taxpayers may have an identification number, a reference number issued by a government to citizens or firms.
The term "taxpayer" generally characterizes o ...
in Ukraine. In 2018,
revenue
In accounting, revenue is the total amount of income generated by the sale of goods and services related to the primary operations of the business.
Commercial revenue may also be referred to as sales or as turnover. Some companies receive reven ...
s of the group consisted of
₴137 billion of
tax
A tax is a compulsory financial charge or some other type of levy imposed on a taxpayer (an individual or legal entity) by a governmental organization in order to fund government spending and various public expenditures (regional, local, or n ...
es and
dividend
A dividend is a distribution of profits by a corporation to its shareholders. When a corporation earns a profit or surplus, it is able to pay a portion of the profit as a dividend to shareholders. Any amount not distributed is taken to be re-i ...
s, which is about 15% of total revenues of the
state budget.
History
1991–1998: Ukrgasprom
After the
dissolution of the Soviet Union in 1991, oil and gas industry of Ukraine governed by Derzhnaftogasprom went through number of changes.
[ The National Commission for State Regulation of Energy (NKRE) was giving out certification for gas trading to anyone without order ignoring the Derzhnaftogasprom.][ Guided by decisions of the First Vice-Prime Minister (on Fuel and Energy Complex) Pavlo Lazarenko, licenses were given to such companies like United Energy Systems of Ukraine (EESU), Intergas, Olgas, International Trading Energy Resources Association (]ITERA
ARETI International Group of Companies is a private energy company headquartered in Geneva, Switzerland. ARETI was created by Igor Makarov in 2015 as a result of rebranding of Itera International Group of Companies, which was started in 1992. T ...
), Ukrzakordonnaftogas, Ukrgasprom, Motor Sich
The Motor Sich Joint Stock Company ( uk, АТ «Мотор Січ») is a Ukrainian aircraft engine manufacturer headquartered in Zaporizhzhia. The company manufactures engines for airplanes and helicopters, and also industrial marine gas turbi ...
, and Donetsk Oblast factories (later those formed the Industrial Union of Donbas
Industrial Union of Donbas (ISD; uk, Індустріальний союз Донбасу, translit=Industrialnyi soiuz Donbasu) is one of the biggest corporations in Ukraine. It is a horizontally integrated holding company that owns or directs ...
).[
In the early 1990s, there was privatization of gas distribution regional network known as "oblgaz" belonging to "Ukrgas".][ The process took place unnoticed and when Naftogas was constituted, not all privately owned distributors wanted to transfer their own stocks to the statutory fund of the National Joint Stock Company.][ Along with the gas distribution network in the same way there were privatized enterprises of petroleum products provision including filling station and fuel repositories that belonged to "Ukrnaftoprodukt".][ The whole petroleum products retail network had to be created by Naftogaz from zero.][
The predecessor of Naftogas is "Ukrgasprom".][
On 28 January 1995 after discussion with government the condition of agreements realization in provision for Ukraine gas imported from Russia and Turkmenistan, the head of "Ukrgasprom" Bohdan Kliuk was dismissed from his post on decision of the Cabinet of Ministers.][Ivan Gonta. ]
Now, already former chief of "Ukrgasprom": "I am not a politician, I'm engineer..." (УЖЕ БЫВШИЙ НАЧАЛЬНИК «УКРГАЗПРОМА»: «Я НЕ ПОЛИТИК, Я ИНЖЕНЕР...»)
'. Mirror Weekly. 3 February 1995 Bohdan Kliuk who was appointed on 6 December 1994, on 19 December 1994 signed an agreement with " Gazprom" on distribution of gas for Ukraine under disadvantageous conditions.[ The issue with Kliuk provided Bakai with an argument to create Naftogas.
]
1998–2014
The company was founded in 1998 after previously being named Ukrgazprom. The main initiators who created the company were Ihor Didenko and Ihor Bakai
Ihor Mykhailovych Bakai, sometimes spells as Igor Bakai, ( uk, Ігор Михайлович Бакай; born 17 November 1963 in Rivne, Ukrainian SSR) is a former Ukrainian statesman, and politician, Director of the Naftogaz (1998–2000). Afraid ...
(better known as Igor Bakai).[US embassy cables: Gas supplies linked to Russian mafia](_blank)
The Guardian
''The Guardian'' is a British daily newspaper. It was founded in 1821 as ''The Manchester Guardian'', and changed its name in 1959. Along with its sister papers ''The Observer'' and ''The Guardian Weekly'', ''The Guardian'' is part of the Gu ...
. 10 December 2008 The last one was the first deputy chairman of the Ukrainian State Committee on Oil and Gas. Before Naftogaz, both Bakai and Didenko worked for other gas trading companies "Republic Corporation" and "Intergas".[
At the end of 1990s, Ukraine was consuming a record of 75 billion m3 per year which was the fourth indicator in the world and seemed strange to say the least considering that the country was not part of the top 20 in GDP volume.][ Eighteen billion m3 were mined inside Ukraine by Naftogas along with some joint enterprises such as "Poltavska Naftogasova Kompania", Plast, Ukrnaftogastekhnologia and others.][ All the gas that was mined by Naftogas and received through transit in obligatory order was being sold to population and state organizations.][ The remaining volume of ]natural gas
Natural gas (also called fossil gas or simply gas) is a naturally occurring mixture of gaseous hydrocarbons consisting primarily of methane in addition to various smaller amounts of other higher alkanes. Low levels of trace gases like carbo ...
, Ukraine was receiving from Russia as part of payment for transit or was buying from Turkmenistan
Turkmenistan ( or ; tk, Türkmenistan / Түркменистан, ) is a country located in Central Asia, bordered by Kazakhstan to the northwest, Uzbekistan to the north, east and northeast, Afghanistan to the southeast, Iran to the sout ...
.[ That gas was sold to industrial enterprises or was being re-exported.][
Also, instead of investing more funds in geological exploration for the Ukrgasprom, its money was used to patch budget and foreign debts holes, which led to decrease in mining of hydrocarbons and decline of industry.][ Most of oil refineries were sold out to Russian companies.][ The only refinery that belongs to Naftogas is Shebelynsky Gas Refinery which Naftogas controls through Ukrgasvydobuvannia.][ Ukraine never had enough mined oil resources capable to provide for oil refining capacity that Ukraine inherited from the Soviet Union.][ Most successful in oil mining is Ukrnafta, however recently Chornomornaftogas had more and more plans to develop newly found deposits.][
Before 2001 Ukraine had two state enterprises in transportation of oil " Main oil pipeline "Druzhba" and "Cisdnieper main oil pipeline".][ The pipelines were often used by Russian companies, but after Ukraine built connecting pipeline Odessa – Brody (Black Sea coast – West Ukraine) Russian companies installed an alternative pipe route Sukhodolnaya–Rodionovskaya.][
In 2001 several Ukrainian parliamentarians made inquiry to the Prosecutor's General Office, Tax Agency, and Security Service requesting to open a criminal case against the head of Presidential Administration ]Volodymyr Lytvyn
Volodymyr Mykhailovych Lytvyn ( uk, Володи́мир Миха́йлович Литви́н, ; born April 28, 1956) is a Ukrainian politician best known for being Chairman of the Verkhovna Rada, the Ukrainian parliament. Having previously se ...
, the former chairman of Naftogaz Ihor Bakai
Ihor Mykhailovych Bakai, sometimes spells as Igor Bakai, ( uk, Ігор Михайлович Бакай; born 17 November 1963 in Rivne, Ukrainian SSR) is a former Ukrainian statesman, and politician, Director of the Naftogaz (1998–2000). Afraid ...
, the administration chairmen of joint-stock company "Ukrgasprom" Bohdan Kliuk, the director of state enterprise "Ukrgasprom" Illia Fik, and others. Those parliamentarians were Hryhoriy Omelchenko
Hryhoriy ( uk, Григо́рій, Hryhórij ), sometimes Hryhory, may refer to:
* Hryhory Alchevsky (1866–1920), prominent Ukrainian and minor Russian composer
* Hryhoriy Baranets (born 1986), professional Ukrainian football midfielder
* Hryhor ...
, Anatoliy Yermak, and Viktor Shyshkin.
As of 31 December 2008, Naftogaz with its subsidiaries had a total of 172,000 employees. Naftogaz received more than $6 billion of subsidies
A subsidy or government incentive is a form of financial aid or support extended to an economic sector (business, or individual) generally with the aim of promoting economic and social policy. Although commonly extended from the government, the ter ...
in domestic bonds from 2009 to 2012 as regulated gas prices and expensive Russian energy imports led to heavy losses.
2014–present
In August 2014, Ukrtransgaz, the operator of the Ukrainian gas transport system, along with its Slovakian counterpart "Eustream", launched natural gas supplies from Slovakia to Ukraine after signing a Memo of mutual understanding in April. This initiative was driven by Russia's decision in June to cease gas supplies to Ukraine in retaliation for the country seeking closer ties with the European Union. By launching reverse flows, Ukraine claims it is seeking no concessions – only implementation of existing EU law on EU territory. The Third Energy Package
The European Union's Third Energy Package is a legislative package for an internal gas and electricity market in the European Union. Its purpose is to further open up the gas and electricity markets in the European Union. The package was proposed ...
was proposed by the European Commission in 2007 and adopted by the European Parliament and the Council of the European Union in July 2009. This legislation clearly allows for gas to be traded like other commodities, thus creating a more efficient market which is less vulnerable to political pressure. In October 2014 the EU further committed to better connecting its energy grids, saying countries should be able to export 15% of their generation capacity by 2030. The consultancy firm Strategy& (formerly Booz & Co) believes the EU could save €40bn a year by 2030 if it integrates its energy grids.
Slovakia can provide more gas than Ukraine needs. In 2013, Ukraine imported 25.8bcm. Slovakia could provide Ukraine with 30bcm. Ukraine is asking that the EU fully support west-to-east exports to Ukraine, which would eliminate the scope for Russia to use gas as a weapon to achieve its political aims in Ukraine. Norway's energy giant Statoil began transiting gas eastwards from Slovakia in 2014, and Shell
Shell may refer to:
Architecture and design
* Shell (structure), a thin structure
** Concrete shell, a thin shell of concrete, usually with no interior columns or exterior buttresses
** Thin-shell structure
Science Biology
* Seashell, a hard o ...
began in 2015.
In response to the reverse flows initiative, Russia has cut supplies to central and eastern European countries, seeking to prevent exports to Ukraine. In September, Hungary stopped supplying gas to Ukraine, days after a meeting between Hungarian Prime Minister Orban and Gazprom's CEO. Gazprom charges widely different prices to different European countries, which many believe is based on Russia's political goals in the region.
Ukraine is seeking arbitration from the "Stockholm Chamber of Commerce" to fairly assess past debts between the two countries and to establish a fair basis of future operations.
Since April 2014, Ukraine is the only non-EU country to voluntarily publish its volume in storage facilities on the EU transparency platform of Gas Storage Europe (GIE). The company also publishes data on the amount of gas entering and leaving the country.
In November 2014, Ukrtransgaz, the operator of Ukraine's gas transportation system, began posting daily statistics on the information platform of the European Network of Transmission System Operators for Gas (ENTSOG). Also, the same year Naftogaz launched a new website in order to showcase its transparency initiatives. In March 2018, "Naftogaz" won a trial against Russian Gazprom for shortened gas supplies before the Arbitration Institute of the Stockholm Chamber of Commerce The Arbitration Institute of the Stockholm Chamber of Commerce is an institution for international arbitration affiliated with the Stockholm Chamber of commerce in Sweden
Sweden, formally the Kingdom of Sweden,The United Nations Group of ...
, and was set to receive net amount of $2.56 billion.
As of 31 December 2017, Naftogaz has around 72,000 employees and annual revenue of €7.443 billion. Of total revenue, €2.908 billion (39.07%) is generated from oil and gas production, €2.415 billion (32.45%) from oil and gas transit, €1.137 billion (15.28%) from oil transmission and sales and €817 million (10.98%) is generated from gas transmission and sales. Also, a total transit volume in 2017 stood at six-year maximum of 93 billion cubic meters. The transit contract between the Naftogaz and Gazprom is set to expire in December 2019, after which Ukraine will cease to be the main transit country of Russian gas to the European Union
The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been de ...
countries.
In April 2019, the Chinese Sinosure agreed to loan $1 billion in insurance coverage to Naftogaz.
In the first half of 2022, Naftogaz had a deficit of $1.6 billion and as a consequence, went into default.
Three Gas Wars
The first war
According to Gazprom, in February 1993, Ukraine's debt exceeded 138 billion ruble
The ruble (American English) or rouble (Commonwealth English) (; rus, рубль, p=rublʲ) is the currency unit of Belarus and Russia. Historically, it was the currency of the Russian Empire and of the Soviet Union.
, currencies named ''rub ...
s.
That year Gazprom signed an agreement in Warsaw
Warsaw ( pl, Warszawa, ), officially the Capital City of Warsaw,, abbreviation: ''m.st. Warszawa'' is the capital and largest city of Poland. The metropolis stands on the River Vistula in east-central Poland, and its population is officia ...
on the construction of a transit gas pipeline "''Yamal – Western Europe''" bypassing Ukraine through the territory of Poland
Poland, officially the Republic of Poland, is a country in Central Europe. It is divided into 16 administrative provinces called voivodeships, covering an area of . Poland has a population of over 38 million and is the fifth-most populou ...
. In August, the export of energy resources to Ukraine was first terminated for five days.
In 1994, there were stops of gas supplies and new debt repayment requirements by transferring rights to Ukrainian gas pipelines and enterprises.
In 1997, a so called Agreement on friendship, cooperation and partnership with Russia, and a set of agreements on the Black Sea Fleet were signed.
The second war
At the end of 2005, Gazprom in negotiations with Ukraine on the mode of transit and gas supplies has decided to increase gas price from 50–80$ to 160–170$ per thousand m³, motivating it a level of medium-European prices. Ukraine refused to sign contracts for gas supply till 2006.
On January 1, 2009, gas was discontinued for Ukraine, and since January 5, Gazprom decreased its supply for European consumers.
On April 21, 2010 in Kharkiv
Kharkiv ( uk, wikt:Харків, Ха́рків, ), also known as Kharkov (russian: Харькoв, ), is the second-largest List of cities in Ukraine, city and List of hromadas of Ukraine, municipality in Ukraine.[Viktor Yanukovych
Viktor Fedorovych Yanukovych ( uk, Віктор Федорович Янукович, ; ; born 9 July 1950) is a former politician who served as the fourth president of Ukraine from 2010 until he was removed from office in the Revolution of D ...]
and Dmitry Medvedev signed a new agreement on the cost of procurement and transit of gas through the Ukrainian GTS, linking a decrease in the price of 30% with a continuation of the Rent Agreement in Sevastopol
Sevastopol (; uk, Севасто́поль, Sevastópolʹ, ; gkm, Σεβαστούπολις, Sevastoúpolis, ; crh, Акъя́р, Aqyár, ), sometimes written Sebastopol, is the largest city in Crimea, and a major port on the Black Sea ...
for 25 years, by 2042.
Gazprom and Naftogaz Association
In July 2010, Prime Minister
A prime minister, premier or chief of cabinet is the head of the cabinet and the leader of the ministers in the executive branch of government, often in a parliamentary or semi-presidential system. Under those systems, a prime minister i ...
of Ukraine Mykola Azarov
Mykola Yanovych Azarov ( uk, Мико́ла Я́нович Аза́ров, ; né Pakhlo; Cyrillic: Пахло; born 17 December 1947) is a Ukrainian politician who was the Prime Minister of Ukraine from 11 March 2010 to 27 January 2014. He was t ...
said that the Government of Ukraine is negotiating the creation of a gas transportation consortium between Ukraine, the EU and Russia.
On January 25, 2011 EU Energy Commissioner Günther Oettinger
Günther Hermann Oettinger (born 15 October 1953) is a German lawyer and politician of the Christian Democratic Union (CDU) who served as European Commissioner for Budget and Human Resources from 2017 to 2019, as European Commissioner for Digit ...
first stated that the allocation of funds of the EU for modernization of the Ukrainian GTS depends on the guarantees of Russia to the gas market to Europe, and advised the authorities to persuade the Russian side to refuse to build a "Southern Stream" gas pipeline and finance modernization of the Ukrainian GTS. Oettinger mentioned that the total bandwidth in the 2011–2012 submarine gas pipeline with a capacity of 55 billion m³ and the projected gas pipeline "Southern Flood" with a capacity of 63 billion m³ will be 118 billion m³ and will allow Russia to supply gas to the EU without the help of Ukraine or Belarus.
Structure
As of 31 December 2017, the Naftogaz has ownership shares in the following companies:[Short bio]
Liga.net
Production and refinery
* UkrGasVydobuvannya (UGV) (100%), a subsidiary
* Zakordonnaftogaz (100%), a subsidiary
* Ukrnafta
Ukrnafta is a Ukrainian oil and natural gas extracting company, the largest producer of oil and gas in the country. Ukrnafta is also an operator of a gas filling station network in Ukraine nationwide.
In 2006, the company conducted some 91% of oil ...
(50% + 1), open joint-stock association
* Petrosannan Company (50%), Egypt-based joint-stock association
* Carpatygaz LLC (49.99%), joint-stock association
* Chornomornaftogaz
russian: Черноморнефтегаз
, native_name_lang = ru
, romanized_name =
, former type =
, type = State unitary enterprise
, traded_as =
, industry = Oil and gas
, fate =
, prede ...
, state joint-stock association, currently under control of the Russian authorities after the 2014 Russian annexation of Crimea
In February and March 2014, Russia invaded and subsequently annexed the Crimean Peninsula from Ukraine. This event took place in the aftermath of the Revolution of Dignity and is part of the wider Russo-Ukrainian War.
The events in Kyiv th ...
Transportation
* Ukrtransgaz (100%), a subsidiary
* Ukrtransnafta (100%), open joint-stock association
* Ukrspetstransgaz (100%), state joint-stock association
Wholesale and distribution
* Gaz Ukrainy (100%), a subsidiary
* Naftogaz Trading Europe S.A (100%), Swiss based company
* Kirovohradgaz (100%)
* Ukravtogaz (100%)
Subsidiary enterprises
* Vuhlesyntezgaz Ukraiiny (100%)
* Naftogaz-Energoservice (100%)
International activities
Ukraine now plays a vital role in both the storage and transit of gas in Europe and in improving EU energy security. Ukraine has the largest storage capacity in Europe, which enables the country and its European partners to accumulate over 30 bcm of gas during summer periods when prices are lowest. Ukraine is also strategically placed to play the role of a transit hub. Its interconnectors have the ability to transfer gas from central Europe to South-Eastern Europe, which is the most exposed region to Russia's gas monopoly. Naftogaz asserts that ensuring gas flows freely will significantly improve the liquidity and the stability of the EU market, making it more resilient to political pressure.
The company drills for oil in the Western Desert in Egypt
Egypt ( ar, مصر , ), officially the Arab Republic of Egypt, is a transcontinental country spanning the northeast corner of Africa and southwest corner of Asia via a land bridge formed by the Sinai Peninsula. It is bordered by the Medit ...
. On December 13, 2006, Naftogaz 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.[Naftogaz Ukrainy Starts Production Of Oil From Extension Well In Egypt](_blank)
Ukrainian News Agency
The Ukrainian News Agency ( uk, Інформаційне агентство "Українські Новини"; ''Informatsiyne ahentstvo "Ukrayins'ki Novyny"'') is a Kyiv-based Ukrainian news agency. It produces and provides political, business ...
(February 24, 2009) In 2014 Naftogaz began natural gas extraction in Egypt. The company's oil production in Egypt estimated at 260,000 tonnes for 2014, which is more than 10% of annual production in Ukraine. A new natural gas pipeline allowing for extraction of approximately 300,000 cubic meters per day has also been launched.
Corruption
The Yanukovych government was famously despotic and corrupt. Naftogaz has been seen as one of the biggest sources of corruption in Ukraine for years with many of the country's billionaires having acquired much of their wealth through gas arbitrage based on differences between the prices of Russian gas imports, gas exports to the EU and government energy subsidies
Energy subsidies are measures that keep prices for customers below market levels, or for suppliers above market levels, or reduce costs for customers and suppliers. Energy subsidies may be direct cash transfers to suppliers, customers, or rel ...
to homes and businesses.
Yevgeny Bakulin
Yevgeny Bakulin, who was a close ally of former deputy prime minister Yuri Boiko, was appointed as the chief executive of state energy company Naftogaz in 2010 by the ousted president Viktor Yanukovich
Viktor Fedorovych Yanukovych ( uk, Віктор Федорович Янукович, ; ; born 9 July 1950) is a former politician who served as the fourth president of Ukraine from 2010 until he was removed from office in the Revolution of Di ...
. Ukrainian police detained Bakulin in connection with a corruption investigation. Yevgeny Bakulin is still under three separate investigations into suspected corruption in the gas industry that has cost the Ukrainian state about $4 billion. Bakulin’s arrest is related to Dmytro Firtash
Dmytro Vasylovych Firtash ( uk, Дмитро́ Васи́льович Фі́рташ; born 2 May 1965) is a Ukrainian businessman who heads the board of directors of Group DF. He was highly influential during the Yuschenko administration and th ...
’s arrest in Vienna on the 13th of March, 2014, as a direct consequence of Firtash’s arrest charges filed by FBI. This is due to the fact that Bakulin was an important player in the corruption scheme of Dmytro Firtash
Dmytro Vasylovych Firtash ( uk, Дмитро́ Васи́льович Фі́рташ; born 2 May 1965) is a Ukrainian businessman who heads the board of directors of Group DF. He was highly influential during the Yuschenko administration and th ...
, Serhiy Lyovochkin, a Ukrainian politician – and Yuri Boiko, the former Energy Minister. Bakulin is suspected of heading a "criminal group" whose members include other senior current and former Ukrainian government members. Ukrainian police seized 42 kilograms of gold and $4.8 million in cash during a search of the apartments. Ukrainian investigators charged Bakulin with the theft of $243.5m from the company in one single case. Minister of Internal Affairs Arsen Avakov in comments at the time of Bakulin's arrest accused him of complicity in the theft of over $4bn from the company during his time in office from 2010 to 2014.
Ukraine’s parliament approved the stripping of immunity from prosecution from Bakulin, a lawmaker from the Opposition Bloc, and to allow his arrest. The Prosecutor General’s Office has charged Bakulin with the embezzlement of particularly large amounts of money while he was serving as the head of Ukraine’s state oil and gas company, Naftogaz of Ukraine, in 2010.
The embezzlement was part of the so-called “Boyko’s Drilling Rigs” case, when, reportedly under the supervision of the Fuel and Energy Minister at the time, Yuriy Boyko, Naftogaz purchased two oil and gas rigs for $800 million, almost a double their real price, and allegedly laundered the overpaid money – some $330 million. Bakulin didn’t attend the parliament session, and despite the Rada’s approval of his arrest, he still had an opportunity to escape, as Prosecutor General Yuriy Lutsenko earlier told parliament that Bakulin was abroad now.
On April 25, four weeks after he was detained, a Kyiv court released Bakulin on bail of only UAH10m, around $1m. He is believed to have since left the country to Russia, ostensibly for urgent medical treatment in Israel.
Bakulin is currently wanted for being a subject of “Boyko’s tower” case. The Swiss Federal Criminal Court has granted assistance to Ukraine in the Bakulins case. Accused of fraud, he would have cashed million dollars on Swiss bank accounts in the name of his son and daughter, Nikolay and Svetlana. and Bakulin's sister Tatyana Malygina to buy real estates in Germany and Austria.
Bakulin’s link to Naftogaz illustrates why the continued influence of oligarchs will likely hamper the country’s drive to reform.
In October 2014, George Soros
George Soros ( name written in eastern order), (born György Schwartz, August 12, 1930) is a Hungarian-American businessman and philanthropist. , he had a net worth of US$8.6 billion, Note that this site is updated daily. having donated mo ...
named Naftogaz to be "a black hole in the budget and a major source of corruption" and called for a radical reform of the company, which could "totally eliminate Ukraine's dependence on Russia for gas". Radio Free Europe/Radio Liberty produced a short documentary entitled "The Palaces of Ukraine's Oil and Gas Men" about the homes of Naftogaz management during the presidency of Viktor Yanukovych
Viktor Fedorovych Yanukovych ( uk, Віктор Федорович Янукович, ; ; born 9 July 1950) is a former politician who served as the fourth president of Ukraine from 2010 until he was removed from office in the Revolution of D ...
, who was overthrown in 2014.
In October 2019, Naftogaz got caught up in the impeachment proceedings against President Donald Trump
Donald John Trump (born June 14, 1946) is an American politician, media personality, and businessman who served as the 45th president of the United States from 2017 to 2021.
Trump graduated from the Wharton School of the University of Pe ...
in the US, when news broke that a group of businessmen with allegedly close ties to the President and his personal lawyer, Rudy Giuliani, intervened in an attempt to change the management of Naftogaz. An Associated Press
The Associated Press (AP) is an American non-profit news agency headquartered in New York City. Founded in 1846, it operates as a cooperative, unincorporated association. It produces news reports that are distributed to its members, U.S. ne ...
report reveals how businessmen Lev Parnas, Igor Fruman and Harry Sargeant III allegedly attempted to replace Naftogaz CEO, Andriy Kobolyev
Andríy Kóbolyev (; born August 16, 1978) is a Ukrainian politician and businessman, former chief executive officer of Ukrainian largest national oil and gas company Naftogaz.
From 2020 Andriy Kobolyev has been a member of the supervisory board ...
, and sought to broker a deal to sell their own natural gas to the company.
Heads of the Boads
Directors of the company since 1998:
* 1998–2000 Ihor Bakai
Ihor Mykhailovych Bakai, sometimes spells as Igor Bakai, ( uk, Ігор Михайлович Бакай; born 17 November 1963 in Rivne, Ukrainian SSR) is a former Ukrainian statesman, and politician, Director of the Naftogaz (1998–2000). Afraid ...
[Havrysh, O. ]
Oil and gas schemes of the President. Part 2. Gas (Нефтегазовые схемы Президента. Часть 2. Газ)
'. Ukrayinska Pravda
''Ukrainska Pravda'' ( uk, Українська правда, lit=Ukrainian Truth) is a Ukrainian online newspaper founded by Georgiy Gongadze on 16 April 2000 (the day of the Ukrainian constitutional referendum). Published mainly in Ukrai ...
. 19 April 2005
* 2000–2000 Vasyl Rozghonyuk (acting)
* 2000–2000 Ihor Didenko
* 2000–2002 Vadym Kopylov
Vadym Anatoliyovych Kopylov ( uk, Вадим Анатолійович Копилов) is Ukraine, a Ukrainian Public figure, statesman.
He has served as deputy chairman of Ministry of revenues and duties of Ukraine, State Tax Service of Ukraine, ...
* 2002–2005 Yuriy Boyko
Yuriy Anatoliyovych Boyko ( uk, Юрій Анатолійович Бойко, russian: Ю́рий Анато́льевич Бо́йко; born 9 October 1958) is a Ukrainian politician who served as one of the Vice Prime Ministers of Ukraine betwe ...
* 2005–2006 Oleksiy Ivchenko
* 2006–2006 Oleksiy Bolkisyev
* 2006–2007 Volodymyr Sheludchenko
* 2007–2007 Yevhen Bakulin
* 2007–2010 Oleh Dubyna
* 2010–2014 Yevhen Bakulin
* 2014–2021 Andriy Kobolyev
Andríy Kóbolyev (; born August 16, 1978) is a Ukrainian politician and businessman, former chief executive officer of Ukrainian largest national oil and gas company Naftogaz.
From 2020 Andriy Kobolyev has been a member of the supervisory board ...
* 2021–2022 Yuriy Vitrenko
Yuriy Yuriyovych Vitrenko ( uk, Юрій Юрійович Вітренко; born 17 September 1976) is a Ukrainian businessman.
Vitrenko was born and raised in Kyiv before completing his education abroad. He spent his early professional caree ...
* 2022– Oleksiy Chernyshov
See also
* Natural gas transmission system of Ukraine
The natural gas transmission system of Ukraine is a complex of natural gas transmission pipelines for gas import and transit in Ukraine. It is one of the largest gas transmission systems in the world. The system is linked with natural gas transmiss ...
* Natural gas in Ukraine
Ukraine has been estimated to possess natural gas reserves of over 1 trillion cubic meters, and in 2018 was ranked 26th among countries with proved reserves of natural gas. Its total gas reserves have been estimated at 5.4 trillion cubic meters. ...
References
External links
*
*
Official website of Ministry of Fuel and Energy of Ukraine
* Zanuda, A.
20 years of Ukraine-Russia gas relations: want a peace – be ready for a war (20 років україно-російських газових відносин: хочеш миру – готуйся до війни)
'. BBC Ukraine. 7 February 2013.
* Lisnychuk, O., Sushko, O.
Are the political-economic groups an obstacle for political development in Ukraine? (Чи є політико-економічні групи перешкодою для політичного розвитку України?)
'. Friedrich Ebert Foundation, Regional representation in Ukraine, Belarus and Moldova. Kyiv, 2005
* Yeryomenko, A.
"Naftogaz Ukrayiny": Brief history in events and personalities («НАФТОГАЗ УКРАЇНИ»: КОРОТКА ІСТОРІЯ В ПОДІЯХ ТА ОСОБАХ)
'. Mirror Weekly. 23 May 2003.
* Yeryomenko, A.
Bohdan Klyuk: We consume gas as if to spite our enemies (Богдан КЛЮК: «У НАС ГАЗ ПОТРЕБЛЯЮТ, СЛОВНО НАЗЛО ВРАГАМ»)
'. Mirror Weekly. 15 August 1997.
An off-shore company will help Naftogas to restructure its debt (Офшор допоможе "Нафтогазу" реструктурувати борги)
(original source
Naftogas will restructure its debts through an off-shore company ("Нафтогаз" реструктурує борги через офшор?)
Ukrayinska Pravda
''Ukrainska Pravda'' ( uk, Українська правда, lit=Ukrainian Truth) is a Ukrainian online newspaper founded by Georgiy Gongadze on 16 April 2000 (the day of the Ukrainian constitutional referendum). Published mainly in Ukrai ...
(Ekonomichna Pravda). 28 July 2009
{{Petroleum_industry
Oil and gas companies of Ukraine
Ministry of Energy (Ukraine)
Companies based in Kyiv
Government-owned companies of Ukraine
Oil companies of Ukraine
Natural gas companies of Ukraine
Natural gas pipeline companies
Energy companies established in 1991
Non-renewable resource companies established in 1991
Ukrainian companies established in 1991
Natural resource conflicts
Ukraine
Ukraine ( uk, Україна, Ukraïna, ) is a country in Eastern Europe. It is the second-largest European country after Russia, which it borders to the east and northeast. Ukraine covers approximately . Prior to the ongoing Russian inv ...
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