Dark clouds over the Ukrainian gas market reform

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.