Yuri Vitrenko has resigned from his role as executive chairman of Ukraine’s state oil and gas producer and importer Naftogaz Ukrainy.
Prime Minister Denis Shmygal’s government agreed to accept his letter of resignation earlier this week as the country approaches the critical winter period.
No reasons for Vitrenko’s dismissal have been given, either by the government or Vitrenko, though Naftogaz said it expects to provide additional information on 3 November, which will be Vitrenko’s “last working day” with the company.
Vitrenko was appointed executve chairman in early 2021, but has recently hinted of growing disagreements with the government over the company’s path and policies during the war with Russia, which invaded the country in February.
His dismissal follows the unexpected resignation of another key executive in September, Sergey Makogon, who headed Operator GTS Ukrainy, which is responsible for operating the country’s gas pipeline network and exporting incoming Russian gas to Slovakia and other neighbouring countries in the west.
Makogon has said that he considers the reasons for his dismissal as being “manipulative, formal and groundless”, and that he would prepare to contest them in court.
Kyiv-based news portal Ukrainskaya Pravda has reported suggestions from the industry that the government may have passed over Naftogaz’ statutes, which state that only the company’s supervisory board, consisting of independent directors, can dismiss the company’s executive chairman.
Vitrenko’s dismissal comes as Ukraine faces a difficult winter ahead, with an estimated 40% of the country’s energy generating infrastructure being damaged since 10 October following Russian missile and drone attacks.
One Naftogaz executive told Upstream that the company has “various working scenarios and contingencies [for the winter] because the situation on the ground is fluid”.
“The country’s largest nuclear power plant near Zaporizhzhya remains under Russian control, while Russian air bombings of energy infrastructure are causing black-outs throughout the country,” the executive said.
“One of our scenarios is that Naftogaz may expect a decrease in gas consumption both from industry and from consumers, many whom have sought refuge in Europe. However, we have gas use increasing in some instances due to electricity shortages”.
“Ukraine is importing coal. Also, we might be in a position very soon where Naftogaz will need to import natural gas to close the gap as the winter continues to balance out the energy supply with demand,” the executive added.
Independent gas imports
The recent drop in European spot gas prices and reported full storage on the continent has encouraged European gas traders to start sending temporary volumes to Ukraine’s underground storage facilities via the country’s connectors to Slovakia, Hungary and Poland, despite the war risks.
Flows from European traders to Ukraine’s storage facilities have varied between 10 million and 25 million cubic metres per day since mid-October, according to Operator GTS Ukrainy.
Ukrainian authorities allow Western traders to store gas temporarily in the country’s underground storage facilities without paying any taxes in the event the volumes are returned to Europe later. Stored gas may also be sold inside Ukraine after import taxes are paid.
Meanwhile, the European Union is exploring ways to provide assistance to Ukraine’s energy sector following “cruel and inhumane” Russian attacks, EU Energy Commissioner Kadri Simson said during a visit to Kyiv on Tuesday, Reuters reported.
This assistance will have to come from EU institutions, member states, international partners and private donors, she said.
Simson indicated that the EU’s ability to rapidly provide all the spare parts Ukraine needs may be limited, but said the 27-member bloc would do all it could to provide equipment for power generation.
Ukraine’s largest power supplier, UkrEnergo, also said that it may have to import some electricity from Europe later as the country’s system is connected to the continent’s power grid.
* This story has been amended to reflect a Naftogaz' comment on a voluntary resignation by Vitrenko. On 3 November, Naftogaz reported its net loss for fist half of this year widened to $1.57 billion.
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