Ivchenko Fails Gas Prices

KIEV, Ukraine -- Naftogaz Ukraine CEO Alexey Ivchenko resigns to become one of Supreme Rada’s deputies. The resignation is attributed to Ivchenko’s inability to secure guarantees for stable gas prices in contracts with Gazprom, the failure of gas negotiations with Turkmenistan and the drop in financial rating of Naftogaz Ukraine.

Naftogaz Ukraine CEO Alexey Ivchenko

The candidacy of the new CEO will depend on the strength of the parliamentary coalition.

Ivchenko submitted resignation yesterday morning. The ministers unanimously sealed it and Ukrainian President Viktor Yushchenko had the document in two hours.

In Naftogaz Ukrainy, they insist Ivchenko has vacated the office with no political pressure. “Alexey Ivchenko decided to switch over to the work in Supreme Rada,” explained Eduard Zanyuk, an adviser to Naftogaz CEO.

“I’m not going anywhere yet. No one has dismissed or will dismiss me,” Ivchenko vowed in ten days after his first deputy Andrey Lopushansky vacated the office on April 12, apparently not dreaming of another employment then.

Meanwhile, the analysts attribute the resignation, first of all, to gas agreement of January 4 sealed by Naftogaz and Gazprom, as it doesn’t guarantee the price of $95/1,000 cub m for 2006 to 2008.

As a result, Gazprom submitted a letter to Naftogaz in early May, calling for the start of the talks about gas prices for the second half-year.

“I see no real opportunities for hiking gas price for Ukraine by Russia,” Yushchenko rebuffed then, signaling it was the end of Ivchenko’s career in Naftogaz.

Other reasons could be the failure of gas negotiations with Turkmenistan and the drop in Naftogaz rating. Naftogaz payables widened from $500 million in March 2005 to $2.02 billion in May 2006, having prompted Fitch to curtail the rating from BB+ to B-.

Source: Kommersant


Anonymous said…
This only happens in Ukraine, where the head of the gas concern failed on several counts and he gets rewarded by being appointed as Deputy to Parliament.