Who Owns Ukrainian Gas

Who Owns Ukrainian Gas

by Vladimir Berezhnoy
Izvestia, 27 April 2006
[translated by Pavel Pushkin for What The Papers Say, via the Ukraine List]

The Wall Street Journal reported the other day, citing informed sources in Europe and the United States, that the US Justice Department has started investigating the operations of RosUkrEnergo. The company supplies gas from Russia and Central Asia to Ukraine, as well as to Slovakia, Hungary, Poland and Estonia. Americans grew curious about the composition of owners of the company considering its structure non-transparent.

Investigators from the US Justice Department even met with holders of the Ukrainian half of shares of Raiffeisen Investment AG and evidently tried to find out who was the real owner of
RosUkrEnergo from the Ukrainian side. Austrians met with investigators but did not say if they disclosed terrible secrets of the gas company to them. This does credit to them but also lets journalists feel free in guessing on pages of newspapers who is the real owner of RosUkrEnergo.

Before saying briefly whom journalists have presumed to be the owners we can be glad for the sake of American lawyers. They have evidently solved domestic problems of their own country a long time already, that is why they have time and wish to interfere into business that is not theirs. In any case, it depends on what is considered your business. The Wall Street Journal says, “The investigation will evidently be unpleasant for Moscow that is trying to use its current chairmanship in G8 for propaganda of energy security and will strengthen the apprehensions of Europe about the attempts of Gazprom to buy energy assets there.” Naturally, a prospect of troubles against the background of G8 summit is worth making Moscow nervous. Americans will not miss such chance.

Alas, Moscow turned out to be not involved and work of investigators not so difficult. Conducting our own investigation, we found that a 50% stake in RosUkrEnergo belonged to Gazprom, which was already known to everyone. We have also learned that behind the Ukrainian half of RosUkrEnergo there was not “citizen of many countries Semen Mogilevich, wanted by Interpol” and not even Leonid Kuchma contrary to the hints of the “orange” ones. It was sufficient to do an online search to discover that RosUkrEnergo AG was registered in the commercial register of the Swiss canton Zug on July 22 of 2004. Shareholders of the company are Gazprom and Raiffeisen Investment AG on the parity basis. The declared goals of activity are trade in commodities in the energy sector.

It was also not difficult to obtain copies of documents that were incidentally not classified and were already issued to the interested companies who wanted to know how transparent was the structure of owners of RosUkrEnergo. Two names were mentioned in the report of auditors about financial operations of the company between July 22 of 2004 and December 31 of 2005. This is D. Firtash (owning 90% of shares) and I. Fursin (10%). These two Ukrainian citizens, not very well known to the public, are beneficiaries of the company. There are no grounds to doubt this information, since the audit was done by PricewaterhouseCoopers and its report has been quoted.

It is possible only to guess why the truth has not surfaced for such a long time. Demands to disclose the entire list of owners of RosUkrEnergo were made during the demonstrations in Independence Square. However, when Yushchenko and Timoshenko ascended to power these demands were immediately hushed down. From this circumstance it is possible to presume that the “orange” ones are quite content with Firtash and Fursin, as well as the “white-blue” ones who have not initiated any investigations too. Now Timoshenko calls on termination of the gas agreement between Ukraine and Russia and already demands a new investigation. It’s uncertain whether Timoshenko is the person whom the US Justice
Department is helping so actively. Another point is clear. RosUkrEnergo has fulfilled all obligations to gas recipients in Europe. Gas has been sold, transit is being done and there is no way back. From this point of view Europe has nothing to worry about, moreover so against the background of preparation for the summit of G8 the topic of which is energy security.

As to the questions related to transparency, ownership structure and so on, it is necessary to address them to authorities in Kiev. They evidently know everything that should be known about Firtash and Fursin, because they have entrusted to these people an important business of “international trade in commodities in the energy sector.”

http://orangeukraine.squarespace.com/long-articles/2006/5/4/who-owns-ukrainian-gas.html

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