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'Compromise solution' in place

Interview: Juri Rescheto / elNovember 7, 2014

Andriy Kobolev is the CEO of Naftogaz, Ukraine's state gas and oil company. He talks to DW about resolving the gas dispute with Russia and providing service to Ukraine's separatist territories.

Ukraine's Naftogaz CEO Andriy Kobolev
Image: picture-alliance/dpa/Sergei Chirikov

DW: Andriy, your company Naftogaz has paid the first installment of $1.45 billion (1.16 billion euros) to Russia's Gazprom. The second installment will be higher to compensate for old debts. How does it make you feel to depend on the EU for money to pay your bills because you don't have the money yourself?

Andriy Kobolev: Firstly, we believe the solution achieved in Brussels last week is a balanced one, which was designed to enable each party to achieve its goal. Money provided by international financial institutions is part of the solution, and it is a sort of compensation for Ukraine for our acceptance of conditions, for example, the price, which is in the moment higher, as we are buying from European markets. But again, this is a compromise solution, which should help us get through this winter without another gas crisis.

How do you intend to pay for future gas deliveries without any help from Russia?

We'll have three sources of funds - firstly, a collection from local markets; secondly, loans from commercial banks; and thirdly, money from international financial institutions.

A Gas Deal with Ukraine - Delivery from West to East

DW: Even if you are able to provide Ukrainian consumers with Russian gas by the end of the winter, what are you going to do after that? How does Naftogaz manage a more permanent solution?

A more permanent solution should be based on a fair market approach. And this fair market approach should be applied in two aspects. The first aspect is the pricing of Russian gas. It should be fair, and it should be market-based. Secondly, the integration of the Ukrainian gas transmission system into the European gas transmission network which would allow us to have access to more European gas.

Ukraine has proposed that Russia take care of providing gas to the self-proclaimed People's Republics of Donetsk and Luhansk. Is that because Naftogaz isn't able to do it or because it doesn't want to do it?

Naftogaz is supplying gas to that region at the moment. There are no technical issues. All technical capabilities are in place. The only issue we are facing is a financial one. If the Russian Federation or mainly Gazprom insists on permanent payment, which is normal, on all outstanding invoices, then not getting money from that region creates a financial deficit for Naftogaz, which Naftogaz believes is not something it should bear.