Naftogaz to repay USD 380 mln to Gazprom by Dec, negotiations to continue

Naftogaz of Ukraine has agreed with Russia’s Gazprom to repay USD 380 mln of its reportedly USD 2.4bln debt by December 1, Naftogaz Deputy Board Chair Ihor Didenko said yesterday at a roundtable entitled “Energy Policy of Ukraine within the Global Financial Turmoil.” After this partial repayment is made, the parties will resume negotiations both on settling the remaining debt and the gas price for next year. Naftogaz said it is currently looking for sources of repaying its outstanding debt, one option can be prepayment by Gazprom for gas transportation. Daily Kommersant reported, citing undisclosed sources, that of the USD 2.4 bln Naftogaz owes, USD 329 mln was for September, USD 799 mln for October, USD 835 mln for November and a penalty of USD 347 mln. On another note, Naftogaz authorities disclosed that they received a draft agreement from Gazprom which presumes that the gas price will be linked to prices of oil products, namely fuel oil and gas oil, adjusted for a certain coefficient. Naftogaz requested Gazprom provide technical details on how the formula will be calculated; it has not received a response from Gazprom so far. CEO of Gazpromsbyt Ukraina, Gazprom’s Kyiv subsidiary, said that the parties are also considering another option: to fix the price separately for 2009 and for 2010.