22 March 2017, Wednesday, 15:22 309

Naftogaz Admits Bankruptcy In Case Of Losing Case To Gazprom At Stockholm Arbitration

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The Naftogaz of Ukraine national joint stock company admits its bankruptcy in case of losing the case to Russia's Gazprom gas monopoly at the Arbitration Institute of the Stockholm Chamber of Commerce (Sweden) regarding the contract between them on purchase and sale of natural gas.

Yurii Vitrenko, the chief commercial director of Naftogaz of Ukraine, said this live on the website "Novoye Vremia. Business", Ukrainian News Agency reports.

"The State won't be responsible for the debts of the company... The total value of all our assets is lower than the compensation claimed by Gazprom (USD 50 billion). Moreover, we have other creditors who will want to get their assets in case of bankruptcy. For this reason there will be certain problems for Gazprom to receive finance even in case of winning the case against Naftogaz," he said.

Yurii Vitrenko says the gas transportation system of Ukraine does not fall under the risk of alienation, as the State, not the company, owns it.

The same concerns special licenses for production of gas and oil.

According to him, the total claims of Gazprom make USD 80 billion, including USD 50 billion of compensation on the norm of the contract "take or pay."

Gazprom can potentially lose another USD 30 billion by the end of the contract of the Arbitration Institute of the Stockholm Chamber of Commerce confirms the current wording of the contract.

The total claims of Naftogaz make USD 50 billion: USD 30 billion of monetary compensation for overpaid gas cost and revenues short received from gas transit and USD 15 billion from potential benefit.

At that Vitrenko considers that Naftogaz of Ukraine has high chances to receive the compensation if it wins Gazprom.

He said that the decision on the purchase and sale agreement is expected in April, and transit in June.

As Ukrainian News Agency earlier reported, the Naftogaz of Ukraine national joint stock company expects an award on the purchase and sale contract of 2009 in the first quarter of 2017.

In this dispute, Naftogaz of Ukraine is demanding about USD 18.2 billion from Gazprom, of which USD 14.1 billion is compensation for overpayment for gas during the period from 20 May 2011 to October 2015.

In addition, Naftogaz of Ukraine is demanding revision of the contractual price for gas.

Gazprom is also demanding a total USD 38.7 billion from Naftogaz of Ukraine, including a penalty of USD 29.2 billion for violating the "take or pay" principle.