Ukrainian Gas Transmission System Operator (GTSO) saw its profit plummet as a result of a staggering $297 million debt from one of Ukraine’s richest people – exiled billionaire oligarch Dmytro Firtash.
In the first six months, the GTSO made a net profit of Hr 5.6 billion ($205 million), the company reported on Aug. 3. In the first half of 2020, the company had a net profit of more than twice as large, Hr 13.1 billion ($481 million).
“The key negative factor that influenced the company’s financial results is the debt of gas market participants, which amounts to more than Hr 10 billion ($372 million),” the company reported.
The money is owned by regional gas companies that are tasked with transporting gas to households and domestic plants.
About 80% of the total debt, $297 million (Hr 8 million), is owned by Regional Gas Company, which belongs to Firtash, according to the Ukrainska Pravda news outlet.
The Regional Gas Company hasn’t publicly addressed the debt accusations. The Kyiv Post sent Regional Gas Company a request for comment but hasn’t heard back yet.
Firtash has been living in Vienna since 2014, fighting off a U.S. extradition warrant. The U.S. has charged Firtash with bribery and racketeering, accusations he denies.
The GTSO, formerly owned by state gas giant Naftogaz, became independent in 2020. Since then, the authorities have accused Firtash’s Regional Gas Company of pumping gas through the pipeline without paying for it.
The Regional Gas Company is a network of 20 gas distribution operators that represent 80% of the gas transmission market in Ukraine.
Read also: Freeloader Firtash costs Ukraine $326 million this year
There aren’t any legal tools that can force local distributors to repay the GTSO. The grid operator can’t close the pipeline because it would cut off Ukrainian households from gas.
Since January, the GTSO has transported 21.8 billion cubic meters of gas, including 15 billion cubic meters to domestic consumers.
Some 80% of the GTSO’s Hr 20 billion ($720 million) profit in 2020 came from international transit from Russia to Europe, while 20% of the state-owned company’s revenue came from gas shipped to local consumers.
