Ukraine's PM: Naftogaz Will Be Profitable for First Time This Year

Ukraine's prime minister Arseniy Yatsenyuk has predicted that 2016 will be the first time in its history that state-owned gas firm Naftogaz Ukrainy will be profitable, thanks to his government.

Speaking at a parliamentary questions session on February 5, he said that if Naftogaz continues its trend of reducing its deficit as it did in 2014 and 2015, the company will become profitable for the first time. Naftogaz recorded a deficit of $10bn in 2014 while last year it was $1bn. 

He blamed the levels of corruption in the past for the lack of profitability seen in the gas sector and credited the current government for stamping it out. 

"Billions of dollars have been pumped out of the state-owned company Naftogaz of Ukraine, there have been dozens of intermediary companies, hundreds of companies and shadowy contracts with the Russian Federation looting of billions of dollars from the pockets of taxpayers," he said.

"All the previous prime ministers and governments were just talking. This government has succeeded. No more intermediaries, no more shadowy Russian companies – just direct contracts," he said. Naftogaz is the national gas company of Ukraine. It was founded officially in 1998. 

Naftogaz seeks to establish fair value

The prime minister's comments follow a tender announcement from Naftogaz Ukrainy. On February 4, Naftogaz said that it was inviting companies to tender for a contract to determine the fair value of the key resources and capital investments of the company, its subsidiaries and associated companies of which it owns more than half. 

The expected cost of the service is $4.55mn. The company gave a deadline deadline for completion of 31 May 2017 and offers had to be submitted by March 16 this year.

To qualify companies must have been on the state's register of qualified auditors since 1 January 2016 and have documentary evidence of experience in similar work, among other requirements, Naftogaz said.

Erica Mills