After a two-year break, Ukraine will resume imports of Russian gas as required by a Stockholm arbitration ruling, Ukraine state oil and gas producer Naftogaz CEO Andriy Kobolyev said at a press briefing on Jan. 17.
Last December the Stockholm arbitration tribunal concluded a three-year dispute between Naftogaz and Russian state-owned Gazprom over the terms of a 2009 gas contract. The two companies filed multibillion-dollar claims against each other in 2014.
Ukraine demanded compensation for overpaying for gas supplies and being underpaid for transit services between 2009 to 2016. Russia, in return, demanded penalties from Ukraine for having purchased a smaller amount of gas in 2012-2016 than had been agreed in the contract terms.
There was no winner in the case. The Stockholm arbitration tribunal decreased the annual supply of Russian gas to Ukraine from 52 billion cubic meters to five while Gazprom had to lower the price.
“We at Naftogaz have no reasons to view negatively Gazprom’s liability to sell us five billion cubic meters of gas for the price lower than for European gas,” Kobolyev said on Jan. 17 and added that Naftogaz will continue buying gas from Europe.
Ukraine is still heavily dependent on gas imports, having bought 14 billion cubic meters last year from European countries, the United States, and South Africa.
On its way to energy independence, Naftogaz set a goal to increase domestic production to 20 billion cubic meters by 2020 through its subsidiary, UkrGazVydobuvannya. In 2017, Ukraine’s largest gas producer UkrGazVydobuvannya produced 15.2 billion cubic meters of gas, the most in more than two decades. This year it plans to increase production to 15.9 billion cubic meters of gas.
However, the goal will be hard to achieve without new licenses on extraction. Last year, a Kyiv court annulled Naftogaz’s licenses on the development of three gas deposits in Poltava Oblast upon the request of the State Geology Service.
Kobolyev said that the licenses had been revoked for far-fetched reasons and that his company had already invested Hr 1 billion into them. “We heard that those licenses will be put up for sale. We will file a lawsuit to get compensation,” he said.
UkrGazVydobuvannya has had issues in Poltava for more than two years, director Oleg Prokhorenko said on Jan. 17. He criticized the Poltava Oblast Council for refusing to issue new permits on deposit development.
The company also applied to the State Geology Service to extract from five fields on the Black Sea shelf with estimated reserves of 80 to 300 billion cubic meters of gas, the company reported last October.
