Naftogaz expects govt help to cover 09 loss-report

12:55, 02 March 2009
501 0

According to the company`s draft financial plan

Ukrainian state energy firm Naftogaz expects help from the government to cover its projected 2009 losses of 9.5 billion hryvnias ($1.2 billion), a weekly paper reported, citing the company`s draft financial plan.

Naftogaz` debts and the prices it pays for Russian gas imports were at the heart of a three-week standoff at the start of the year between Moscow and Kiev, which led to a gas cut-off affecting millions in Europe.

The paper said Naftogaz plans to receive 92.5 billion hryvnias in revenues and spend 102 billion hryvnias.

Naftogaz then hopes to receive 10.4 billion hryvnias ($1.35 billion) from the government to compensate for the difference in the price it pays for Russian gas and what it receives from utilities, the paper added.

Naftogaz declined to comment.

The government has to approve the draft.

It had kept household gas prices stable for years, even though Russia raised prices steeply since 2005. Last year household prices rose but most are still lower than the $360 per 1,000 cubic metres Naftogaz pays in the first quarter.

Naftogaz paid $179.5 per 1,000 cubic metres last year. This year`s deal gives the company a 20 percent discount on a European market price and the company has said it expected that price to fall steeply throughout the year.

The paper said it aims to sell 10 billion cubic metres of gas to energy companies, 17.3 bcm to households and 10.8 bcm to industries although a further 5 bcm will be sold to industry by Gazpromsbyt, a Gazprom unit.

The volumes of the so-called `technical gas`, which is needed in the pipeline system to transit Russian gas to Europe, amounts to 5.12 bcm.

Naftogaz has a $500 million Eurobond maturing in September.

Reuters via Forbes

If you see a spelling error on our site, select it and press Ctrl+Enter