«Naftogaz» declared victory in court, but «Gazprom» all the same pay

© AFP 2017 / Sergey BobokКомпрессорная station of Naftogaz of Ukraine in Kharkiv«Naftogaz» declared victory in court, but «Gazprom» all the same pay© AFP 2017 / Sergey Bobok

The Stockholm arbitration court on Friday passed a long-awaited decision in a dispute «Gazprom» and «Naftogaz» in connection with the contract for the supply of Russian gas to Ukraine. The two companies took this decision as a victory, however, the money by the court will receive all the same Russian company: more than $ 2 billion for already supplied gas and the annual payment for the supply of at least 4 billion cubic meters of gas starting in 2018.

«Naftogaz» also to obtain considerable sums alleged «win» in a $ 75 billion had to count all that he theoretically could pay to «Gazprom» in the most negative for the Ukrainian state-owned companies the court’s decision.

RIA Novosti interviewed experts considered the decision in General, it is not surprising, noting that a total loss of «Naftogaz» would mean in fact the bankruptcy of both the company and the state as a whole. They also drew attention to the fact that the implementation of the court’s decision Ukraine will again begin to buy Russian gas, but will be forced to abandon the reverse supply from the EU.

«Gazprom» and «Naftogaz of Ukraine» the legal proceedings in the Stockholm arbitration court in June 2014. The bulk of the claims of «Gazprom» to «Naftogaz» in the framework of the dispute on the supplies went to penalties for arrears of gas at the contractual rule of «take or pay» (take or pay). In addition, Gazprom demanded to pay the debt for delivered in may-June 2014 gas and penalties for late payment. «Naftogaz» demanded retroactive changes in gas prices, recovery of overpayments for the unrevised prices and the abolition of the ban on the resale of gas under contract.

The court’s decision

The court decision is not published, so its meaning has to recover from pieces of information found it necessary to disclose the parties to the dispute — «Naftogaz» and «Gazprom».

Arbitration has reduced the annual contract volume of gas purchases by Ukrainian company from Gazprom from 52 to 5 billion cubic meters. As explained at a press conference the head of «Naftogaz» Andrey KOBOLEV, these of 5 billion cubic meters, «Gazprom» will be obliged to deliver during the year with appropriate requests of the Ukrainian side, while Kiev for its part is obliged to buy at least 4 billion cubic meters of gas per year. Thus, as before, the condition «take or pay» applies to 80% of the annual contract volume. These terms will be available from 2018.

A Ukrainian company must also pay to «Gazprom» debt for the gas supplied to 2,019 billion. Interest will accrue in the amount of 0,03% for each day of late payment starting from 22 December. However, «Naftogaz», apparently, managed to reduce the amount of recovery due to the fact that the court had counted it based on reduced prices for the second quarter of 2014 — 352 dollars per thousand cubic meters instead of $ 485, which insisted that «Gazprom».

As for the other parameters of the contract, «Gazprom» it was limited to a statement that «the arbitrators recognized the applicable General provisions». «Naftogaz» also said that the court cancelled the ban on re-export of Russian gas and the binding gas prices to oil products. Thus, now the price for «Naftogaz» will be calculated based on the cost of gas on the European spot market.

The other could not be

Positive decision of the court regarding the payment of «Naftogaz» of all the requirements of Gazprom’s take-or-pay could lead to the bankruptcy of Ukraine, experts say. In particular, group Director for natural resources and commodities, Fitch Dmitry marinchenko said that the claims of tens of billions of dollars under the «take or pay» could become «unreasonable burden «Naftogaz» and the state».

Russian gas price for «Naftogaz» can be more than 200 dollars per thousand cubic meters, but to calculate precisely it is impossible — the exact formula is not disclosed, he said. «I think it will be like on the reverse «hub plus». For example, for 11 months in 2017 Ukraine imported gas at an average of $ 226 per thousand cubic meters. For comparison, the average price of hubs during this period was about 205 dollars, while the average price under the contract with «Gazprom» with the oil binding is less than 200 dollars per thousand cubic meters», — explained the expert.