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3 Oct, 2007 21:28

Ukraine to pay off gas debt by November

Ukrainian gas consumers will pay their debts to Russian energy company Gazprom by November 1. The announcement came in a company press release following talks between Gazprom's head, Aleksey Miller, and the Ukrainian Energy Minister, Yury Boyko.

The two met on Wednesday to negotiate Gazprom's demands that Ukraine settle a $US 1.3 BLN gas debt by the end of the month or face a cut in supplies.
Both Ukraine and Gazprom agree the debt is between economic entities only and is not a political matter. At the meeting, it was decided that the Ukrainian government will ensure the payment of the debt to Gazprom.

Ukraine, as a state, and the Ukrainian government do not owe Gazprom or Russia anything. The issue may concern only relations between economic entities.

Mykola Azarov, Ukraine’s Finance Minister

Ukrainian negotiator Yury Boyko also held brief talks with Russia’s First Deputy Prime Minister, Dmitry Medvedev. Speaking after the meeting, Mr. Medvedev said both sides have agreed the issue will be resolved in due time, and such problems will not occur in the future.
“European suppliers and consumers will not be harmed. I hope our Ukrainian colleagues will find ways to resolve the situation. Today, these issues have been discussed between Gazprom and our Ukrainian partners. According to the schedule, the problems should be eliminated. Besides, an agreement has been reached not to let such issues arise in the future. But I'm sure that for the European consumers the situation will be absolutely comfortable,” Mr Medvedev said.

Talks are still ongoing, but both sides have expressed hope that the problem will be resolved soon.
Meanwhile, speaking in the Ukrainian capital of Kiev, the country’s Prime Minister Viktor Yanukovich said, “Most probably I myself will go to Moscow to settle this problem. The problem is very complicated, but we will do our best to keep the price on the same level and preserve relations by tackling the issue”.
As for the Ukrainian companies involved in the dispute, UkrGazEnergo that receives gas supplies from Russia and distributes them to Naftogaz – Gazprom’s partner in Ukraine – and private suppliers, has acknowledged the $US 1.3 BLN debt.  They said that this is due to the fact that Naftogaz has not paid its bills.
Nevertheless, on Tuesday the head spokesman for Naftogaz said that the company was very surprised to learn there was any kind of debt and stated they will investigate the matter. No official statement has followed since then.

For his part, President Viktor Yushchenko, who is on a visit to Germany, denies Ukraine has any debt to Gazprom.

“I don’t think it was the right move which helps to develop our mutual co-operation, and it appeared in a wrong form and at the wrong time. I want to say just the only thing – that neither the Ukrainian state, nor Naftogaz has any debts to Gazprom,” claimed the Ukrainian President.
It’s feared that the disruption of gas supplies to Ukraine could affect European customers if the question is not settled by November. However, the European Commission has come up with a statement saying that they treat Gazprom as a reliable supplier and the company will not allow the dispute to affect gas supplies to Europe.  Still, a special commission has been set up to monitor the situation.