Naftogaz

1991–1998: Ukrgasprom After the dissolution of the Soviet Union in 1991, oil and gas industry of Ukraine governed by Derzhnaftogasprom went through number of changes. International Trading Energy Resources Association (ITERA), Ukrzakordonnaftogas, Ukrgasprom, Motor Sich, and Donetsk Oblast factories (later those formed the Industrial Union of Donbas). In the early 1990s, there was privatization of gas distribution regional network known as "oblgaz" belonging to "Ukrgas". Bohdan Kliuk who was appointed on 6 December 1994, on 19 December 1994 signed an agreement with "Gazprom" on distribution of gas for Ukraine under disadvantageous conditions. 1998–2014 The company was founded in 1998 after previously being named Ukrgazprom. The last one was the first deputy chairman of the Ukrainian State Committee on Oil and Gas. Before Naftogaz, both Bakai and Didenko worked for other gas trading companies "Republic Corporation" and "Intergas". Those parliamentarians were Hryhoriy Omelchenko, Anatoliy Yermak, and Viktor Shyshkin. As of 31 December 2008, Naftogaz with its subsidiaries had a total of 172,000 employees. Naftogaz received more than $6 billion of subsidies in domestic bonds from 2009 to 2012 as regulated gas prices and expensive Russian energy imports led to heavy losses. The 2009 Russia–Ukraine gas dispute was eventually settled by the 2010 Kharkiv Pact. 2014–present In August 2014, Ukrtransgaz, the operator of the Ukrainian gas transport system, along with its Slovakian counterpart "Eustream", launched natural gas supplies from Slovakia to Ukraine after signing a Memo of mutual understanding in April. This initiative was driven by Russia's decision in June to cease gas supplies to Ukraine in retaliation for the country seeking closer ties with the European Union. By launching reverse flows, Ukraine claims it is seeking no concessions – only implementation of existing EU law on EU territory. The Third Energy Package was proposed by the European Commission in 2007 and adopted by the European Parliament and the Council of the European Union in July 2009. This legislation allows for gas to be traded like other commodities, thus creating a more efficient market which is theoretically less vulnerable to political pressure. In October 2014 the EU further committed to better connecting its energy grids, setting a target of member countries exporting 15% of their generation capacity by 2030. The consultancy firm Strategy& (formerly Booz & Co) believes the EU could save €40bn a year by 2030 if it integrates its energy grids. Norway's energy giant Statoil began transiting gas eastwards from Slovakia in 2014, and Shell began in 2015. In response to the reverse flows initiative, Russia has cut supplies to central and eastern European countries, seeking to prevent exports to Ukraine. In September, Hungary stopped supplying gas to Ukraine, days after a meeting between Hungarian Prime Minister Orban and Gazprom's CEO. Gazprom charges widely different prices to different European countries, which many believe is based on Russia's political goals in the region. In June 2014 Ukraine sought redress from the Stockholm Chamber of Commerce Arbitration Institute to fairly assess past debts between the two countries and to establish a fair basis of future operations. In March 2018, Naftogaz won a trial against Russian Gazprom for shortened gas supplies before the Arbitration Institute of the Stockholm Chamber of Commerce, and was set to receive net amount of $2.56 billion. As of 31 December 2017, Naftogaz had around 72,000 employees and annual revenue of €7.443 billion. Of total revenue, €2.908 billion (39.07%) is generated from oil and gas production, €2.415 billion (32.45%) from oil and gas transit, €1.137 billion (15.28%) from oil transmission and sales and €817 million (10.98%) is generated from gas transmission and sales. In April 2019, the Chinese Sinosure agreed to loan $1 billion in insurance coverage to Naftogaz. In October 2019, Naftogaz was involved in the impeachment proceedings against President Donald Trump in the US, when news broke that a group of businessmen alleged to be very close to the President and his personal lawyer, Rudy Giuliani, intervened in an attempt to change the management of Naftogaz. An Associated Press report reveals how businessmen Lev Parnas, Igor Fruman and Harry Sargeant III allegedly attempted to replace Naftogaz's CEO, Andriy Kobolyev, and sought to broker a deal to sell their own natural gas to the company. In the first half of 2022, Naftogaz had a deficit of $1.6 billion and as a consequence, went into default. In October 2023, the head of Naftogaz, Oleksiy Chernyshov, said that the company does not plan to renew the contract with Russian gas company Gazprom, which ends at the end of 2024. He named the needs of European partners as the only reason why Ukraine still pumps Russian gas. == Three Gas Wars ==

The first war According to Gazprom, in February 1993, Ukraine's debt exceeded 138 billion rubles. That year Gazprom signed an agreement in Warsaw on the construction of a transit gas pipeline "Yamal–Europe pipeline" bypassing Ukraine via the territory of Poland. In August, the export of energy resources to Ukraine was first terminated for five days. In 1994, there were stops of gas supplies and new debt repayment requirements by transferring rights to Ukrainian gas pipelines and enterprises. In 1997, the Treaty on Friendship, Cooperation, and Partnership between Ukraine and the Russian Federation, colloquially known as the 1997 Friendship Treaty, was signed under the auspices of the United Nations in Kiev. The treaty included provisions on respecting territorial integrity, financial and economic cooperation, cultural and informational exchange, and the Black Sea Fleet. Upon going into effect, the treaty annulled the 1990 treaty between the RSFR and USFR. The second war At the end of 2005, Gazprom, in negotiations with Ukraine on the mode of transit and gas supplies, decided to increase gas price from 50–80$ to 160–170$ per thousand m³. Ukraine refused to sign contracts for gas supply until 2006. On January 1, 2009, gas was discontinued for Ukraine, and since January 5, Gazprom decreased its supply for European consumers. On April 21, 2010, in Kharkiv Viktor Yanukovych and Dmitry Medvedev signed a new agreement on the cost of procurement and transit of gas through the Ukrainian GTS, linking a decrease in the price of 30% with a continuation of the Rent Agreement for Sevastopol Naval Base for 25 years, by 2042. Gazprom and Naftogaz Association In July 2010, Prime Minister of Ukraine Mykola Azarov said that the Government of Ukraine is negotiating the creation of a gas transportation consortium between Ukraine, the EU and Russia. On January 25, 2011 EU Energy Commissioner Günther Oettinger first stated that the allocation of funds of the EU for modernization of the Ukrainian GTS depends on the guarantees of Russia to the gas market to Europe, and advised the authorities to persuade the Russian side to refuse to build a Southern Stream gas pipeline and to finance modernization of the Ukrainian GTS. Oettinger mentioned that the total bandwidth in the 2011–2012 submarine gas pipeline with a capacity of 55 billion m³ and the projected gas pipeline "Southern Flood" with a capacity of 63 billion m³ will be 118 billion m³ and will allow Russia to supply gas to the EU without the help of Ukraine or Belarus. ==Structure and leadership==

As of 31 December 2017, the Naftogaz has ownership shares in the following companies: • 2000–2000 Vasyl Rozghonyuk (acting) • 2000–2000 Ihor Didenko • 2000–2002 Vadym Kopylov • 2002–2005 Yuriy Boyko • 2005–2006 Oleksiy Ivchenko • 2006–2006 Oleksiy Bolkisyev • 2006–2007 Volodymyr Sheludchenko • 2007–2007 Yevhen Bakulin • 2007–2010 Oleh Dubyna • 2010–2014 Yevhen Bakulin • 2014–2021 Andriy Kobolyev • 2021–2022 Yuriy Vitrenko • 2022–2024 Oleksiy Chernyshov • 2024–2025 Roman Chumak (acting) • 2025– Sergii Koretskyi ==International activities==

Ukraine now plays a vital role in both the storage and transit of gas in Europe and in improving EU energy security. Ukraine has the largest storage capacity in Europe, which enables the country and its European partners to accumulate over 30 bcm of gas during summer periods when prices are lowest. Ukraine is also a strategically placed transit hub. It has the ability to transfer gas from central Europe to South-Eastern Europe, which relies heavily on Russian gas. Naftogaz asserts it's intention to increase flow of Ukrainian gas into central and South-Eastern Europe, cutting Russian gas out of the EU market and decreasing the ability of Russia to apply political pressure to the region. The company drills for oil in the Western Desert in Egypt. On December 13, 2006, Naftogaz and the Egyptian General Petroleum Corporation had signed an agreement on the exploration and development of oil and gas deposits on the eastern territory of Alam El Shawish East in the Western Egyptian desert. In 2014 Naftogaz began natural gas extraction in Egypt. The company's oil production in Egypt estimated at 260,000 tonnes for 2014, which is more than 10% of annual production in Ukraine. A new natural gas pipeline allowing for extraction of approximately 300,000 cubic meters per day has also been launched. ==Corruption==

The Yanukovych government was famously despotic and corrupt. Naftogaz has been seen as one of the biggest sources of corruption in Ukraine for years with many of the country's billionaires having acquired much of their wealth through gas arbitrage based on differences between the prices of Russian gas imports, gas exports to the EU and government energy subsidies to homes and businesses. ==Yevgeny Bakulin==

Yevgeny Bakulin, who was a close ally of former deputy prime minister Yuri Boiko, was appointed as the chief executive of state energy company Naftogaz in 2010 by the ousted president Viktor Yanukovich. Ukrainian police detained Bakulin in connection with a corruption investigation. Yevgeny Bakulin is still under three separate investigations into suspected corruption in the gas industry that has cost the Ukrainian state about $4 billion. This is due to the fact that Bakulin was an important player in the corruption scheme of Dmytro Firtash, Serhiy Lyovochkin, a Ukrainian politician – and Yuri Boiko, the former Energy Minister. Bakulin is suspected of heading a "criminal group" whose members include other senior current and former Ukrainian government members. Ukrainian police seized 42 kilograms of gold and $4.8 million in cash during a search of the apartments. Ukrainian investigators charged Bakulin with the theft of $243.5m from the company in one single case. Minister of Internal Affairs Arsen Avakov in comments at the time of Bakulin's arrest accused him of complicity in the theft of over $4bn from the company during his time in office from 2010 to 2014. Ukraine's parliament approved the stripping of immunity from prosecution from Bakulin, a lawmaker from the Opposition Bloc, and to allow his arrest. The Prosecutor General's Office has charged Bakulin with the embezzlement of particularly large amounts of money while he was serving as the head of Ukraine's state oil and gas company, Naftogaz of Ukraine, in 2010. The embezzlement was part of the so-called "Boyko's Drilling Rigs" case, when, reportedly under the supervision of the Fuel and Energy Minister at the time, Yuriy Boyko, Naftogaz purchased two oil and gas rigs for $800 million, almost a double their real price, and allegedly laundered the overpaid money – some $330 million. Bakulin didn't attend the parliament session, and despite the Rada's approval of his arrest, he still had an opportunity to escape, as Prosecutor General Yuriy Lutsenko earlier told parliament that Bakulin was abroad now. The Swiss Federal Criminal Court has granted assistance to Ukraine in the Bakulins case. Accused of fraud, he would have cashed million dollars on Swiss bank accounts in the name of his son and daughter, Nikolay and Svetlana. and Bakulin's sister Tatyana Malygina to buy real estates in Germany and Austria. In October 2014, George Soros named Naftogaz to be "a black hole in the budget and a major source of corruption" and called for reform of the company, which could "totally eliminate Ukraine's dependence on Russia for gas". ==See also==