Dark clouds over the Ukrainian gas market reform
Dark clouds over the Ukrainian gas market reform

Author(s): Wojciech Konończuk, Sławomir Matuszak
Subject(s): Energy and Environmental Studies, Economic policy, Environmental and Energy policy, Developing nations, Geopolitics
Published by: OSW Ośrodek Studiów Wschodnich im. Marka Karpia
Keywords: Ukrainian gas market; gas market; energy
Summary/Abstract: In September, three out of five members of the supervisory board of Naftogaz, Ukraine’s largest gas company, announced their resignation and accused the government of stepping up political interference in the company’s activity and blocking measures aimed at reforming the company. This represents yet another instance of the fight for control over Naftogaz and its profit-making subsidiaries, Ukrgazvydobuvannya (which extracts over 70% of Ukraine’s gas) and Ukrtransgaz (the transit pipeline and gas storage facilities operator), which has been gaining momentum in recent months. On one side of the dispute lies what is broadly understood as the ruling camp (the surrounding of the president and the prime minister), while the other side is the pro-reform management of Naftogaz, headed by Andriy Kobolev and backed by Western institutions. // It seems that the government’s goal is to regain control over Naftogaz, including over financial flows between its subsidiaries. The mounting conflict has resulted in a cessation of the gas sector reform, which has been ongoing for over a year. Reforming the gas market had hitherto been viewed as one of the biggest successes of the state modernisation programme that was launched after the Maidan Revolution. Moreover, this halting of the reform process poses the risk that it may subsequently be abandoned entirely.

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