Perhaps the most ill-judged, anti-reform act of the current Ukrainian administration occurred on May 29. That day the Ministry of Finance “dismissed” Walter Boltz, the chair of the Ukrainian gas transmission system operator MGU and a distinguished energy specialist. The word dismissed demands scare quotes as the act almost certainly violates Ukrainian law and the Energy Community Treaty. Nevertheless, this purported sacking is extremely dangerous and has enormous ramifications for Ukraine’s entire reform drive. Without independent supervisory boards, the entire system of energy market reform which has eradicated corruption in the energy sector and turned Naftogaz into the largest single Ukrainian taxpayer would be under threat. Equally, the act threatens the $7 billion transit contract agreed between Naftogaz and Gazprom by undermining the independence of the Ukrainian gas transmission system operator MGU. The transit contract is based on the existence of an independent transmission system operator. If that independence is undermined, Gazprom may pull the transit contract and with it the guaranteed fees that Ukraine needs.
Ukraine's Energy Challenge
OP-ED
Alan Riley: Ukraine’s worst move yet
The headquarters of Naftogaz, Ukraine' state-owned oil and gas company with $7 billion in gross revenue in 2020.
