Kyiv Begins Inventory & Seizure of Gazprom Property

Kyiv, Ukraine, has begun inventorying and seizing the property of Gazprom for the company’s allegedly failing to comply with the Stockholm arbitration and violating the antimonopoly legislation of Ukraine. Ukraine’s Prime Minister Vladimir Groisman released a statement to this effect on the website of the Government of Ukraine. In addition, he ordered Naftogaz and the Ministry of Justice to investigate the seizure of assets of the Russian company “around the world.”

Russian Energy Minister Alexander Novak and European Commissioner for Energy Affairs Maros Shefovich last week discussed Ukraine's intention to seize Gazprom property. Novak himself had previously told reporters that litigation between the Russian and Ukrainian concerns is based on commercial obligations, so they will decide on supplies. In this regard, Novak found that there is no need for a tripartite meeting.

The Government of Ukraine chose to begin seizure of assets after Gazprom refused to begin deliveries to Naftogaz on March 1. Yet it is impossible to legally coordinate this procedure without a direct meeting of the parties, which has not yet happened. The Deputy Chairman of the Board of the Russian company, Alexander Medvedev, drew attention to this, and also said that in early March he had offered Naftogaz a date for the meeting to discuss the conditions for the commencement of deliveries and to review the decision of the arbitrators.

Ukraine needs to settle the issue of gas prices in order to get IMF approval for the next tranche of financial assistance, but the government has yet to reach a compromise on the issue.

“The price of gas for the population should be the same as that paid by importers. Otherwise, the market has a backlog for corruption: you can buy gas at a lower price for the household, and then sell it at a higher price for the industry, pocketing the difference,” said the head of the International Monetary Fund (IMF) in Ukraine, Jost Ljungman in an interview with the magazine ‘New Time.’

“The starting point is to sell gas at a market price in order to use the additional proceeds from the sale to wealthy households to strengthen the system of public subsidies,” Ljungman explained. “It is important to make sure that the beneficiaries are secured.”

Dimitri Dolaberidze