Thursday, 01 June 2017 15:18

The decision of the Stockholm arbitration questioned the “North Stream-2” – expert

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Following the example of “Yukos”, we can see that Russia is reluctant to fulfil the decisions of the international courts. 

Ukraine is still waiting for the decision of the Stockholm arbitration on the buy and sale contract for the compensation for gas overpayment by “Gazprom”, which was delivered to “Naftogas” in 2015, as well as to determine the fair gas price for Ukraine. Director of the energy programs of the Razumkov Centre Volodymyr Omelchenko commented to “Segodnya” newspaper.

“Yesterday’s decision of the Stockholm arbitration is clearly positive for Ukraine, despite all “Gazprom” statements. Certainly, it has not settled the price issue. However, the most that worried Ukraine are “take or pay” principle and the issue of re-export of Russian gas. Given these points, the decision is in favor of Ukraine. It is worth to say, that it removed the huge financial risks not only from “Naftogaz”, but also from Ukraine in general. This is a very positive signal for investors. The decision opens the possibility of “Naftogaz” reform in terms of unbundling (separation of gas transportation from production and supply). Ukraine, in case of successful completion of unbundling, will increase the attractiveness of Ukraine’s gas transportation system, and alternative project “North Stream-2” will be put under a big question. It is an indirect, but very important consequence of the court decision. With regard to the decision on the transit contract, it will be issued a little bit later. It is expected in late June, - said to “Segodnya” newspaper Volodymyr Omelchenko.

According to him, the price in the contract was tied to a basket of oil products due to certain factors. This question the court will consider separately. Regarding the decision on price disputes (which cost of Russian gas for Ukraine can be considered as a market price) I do not expect that it will be issued at the end of June. The same situation with the decision on the sum, which “Gazprom” should pay to Ukraine as compensation for gas supplies at an overvalued price. However, even the decision to return the overpayment amount for gas supply will be taken, it does not mean that “Gazprom” this money return. As we can see in the case of “Yukos”, Russia is reluctant to fulfil international decisions, because it has some kind of internal legislation that limits it, - concluded the expert.

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Last modified on Wednesday, 07 June 2017 12:45
Volodymyr Omelchenko

Director, Energy programmes

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Born in 1967 in Kyiv.

Education: Kyiv Politechnic Institute, Department of Chemical Engineering (1992).

Author of over 50 scientific works and op-ed publications. Took part in development and implementation of international energy projects and scientific research in international energy policy.

Employment:

1992–1996, worked in different positions in the mechanical engineering industry;
1997–1998 — head expert of the division of oil, gas and petroleum refining industry of the Ministry of Economy of Ukraine;
1998–2003 — Naftohaz Ukrayiny National Joint-Stock Company, in charge of oil transportation section;
2004–2007 — chief consultant at the National Institute of International Security Problems of Ukraine’s NSDC;
since February, 2007 — Leading Expert, Razumkov Centre. Director since 2013.

Telephone: (+380-44) 206-85-02
E-mail: omelchenko@razumkov.org.ua

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