Ukraine Mystery Solved

MOSCOW, Russia -- Two influential Ukrainian businessmen were named Wednesday as the owners of a one-half stake in RosUkrEnergo, a mysterious company that controls Ukraine's gas imports.

Citing audit documents, the newspaper Izvestia said Dmitry Firtash - who has in the past played a role in importing gas from Turkmenistan to Ukraine and owns a Kiev basketball club - and Ivan Fursin, a banker, were the beneficial owners of the 50-percent stake.

Raiffeisen Zentralbank in Austria confirmed the names, saying it was holding the stake on their behalf.

In an e-mailed statement, the bank said Centragas Holding, a company based in Vienna, "is a joint owner of RosUkrEnergo." Firtash owns 90 percent of Centragas and Fursin holds the other 10 percent, the statement said.

Raiffeisen said in the past that it held the stake as trustee but declined to disclose the names of the owners.

Firtash, who reportedly spends most of his time in Hungary, could not be reached immediately for comment. Fursin also was not reached.

RosUkrEnergo bounced into the public eye when it was named as the go-between in a deal to resolve a gas pricing dispute between Russia and Ukraine which interrupted supplies to Europe over the New Year.

Russia's state-controlled monopoly Gazprom owns the other 50 percent of Swiss-registered RosUkrEnergo.

The U.S. Justice Department's organized crime section reportedly opened a probe into RosUkrEnergo, with diplomatic and financial sources saying that Raiffeisen had cooperated by providing information on the company.

Izvestia, which is owned by Gazprom, published extracts from an audit report by Pricewaterhouse Coopers that named the two men as owners of Centragas.

Ukraine's energy minister, Ivan Plachkov, was quoted by Interfax- Ukraine news agency as saying that Kiev may review the January gas deal because of the revelation.

RosUkrEnergo's sales in 2005 were around $3.5 billion and it made profits of $500 million from the sale of about 40 billion cubic metres of gas, Raiffeisen has said. That makes it one of Europe's largest gas marketers.

The disclosures come as concern grew that Ukraine, which is the transit route for 80 percent of Russia's gas exports to Europe, was tolerating opaque gas deals, even after the "Orange Revolution" of 2004, that jeopardize regional energy security.

Ukraine's state energy company, Naftogaz, is struggling to pay for gas imports following the January gas deal, under which the import price Ukraine must pay nearly doubled to $95 per 1,000 cubic meters.

Naftogaz has been unable to pass on the gas price increase to consumers and, according to local media reports, ran up losses of at least $500 million in the first quarter of 2006.

Firtash also figures prominently in a recent report by Global Witness, a non- governmental organization that campaigns against corruption involving natural resources, on the structures through which Turkmen gas has been sold to Ukraine.

Global Witness warned that Europe's energy security was threatened by the opaque nature of gas supply deals in the former Soviet states.

Source: International Herald Tribune