Ukrainian lawmaker explains why Naftogaz could not be privatized

Ukrainian Member of Parliament, Chairman of the Verkhovna Rada Committee on Energy, Housing and Utilities Andriy Gerus says National Joint Stock Company (NJSC) Naftogaz of Ukraine could not be privatized now, as this requires the transfer of its gas storage facilities to another state-run company.

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"Naftogaz, as it is today, could not be either subject to privatization or even put up for [an initial public offering] IPO. To make it possible under laws, Naftogaz should transfer its underground gas storage facilities to another state-run company, which is unlikely," he wrote on Facebook on February 10.

According to Gerus, after the unbundling procedure, Ukraine's gas transmission system (GTS) was withdrawn from Naftogaz's control and transferred to a separate company, which is also owned by the state. However, Ukraine's underground storage facilities (USFs) remained part of Naftogaz.

"The [draft] law we have recently passed says that the underground gas storage infrastructure shall belong to a company whose corporate rights are fully owned by the state," he stressed.

As UNIAN reported earlier, CEO of National Joint-Stock Company Naftogaz of Ukraine Andriy Kobolyev said in 2017 the sale of the company's minority stake (15%), which could take place in 2020, would allow the state to receive US$10 billion in revenue, as well as reform the company.

UNIAN memo. NJSC Naftogaz of Ukraine is the largest state-run vertically integrated oil and gas holding whose subsidiaries account for about 90% of oil and gas production in Ukraine. Naftogaz develops oil and gas fields, produces crude oil and natural gas. Its core business is also transportation and trade in fuel through its own network of filling stations.