JKX 2006

Washington's Gerald Ford Cult


No Mystery in Ukraine
Monday, January 1, 2007; Page A12


Regarding "Closer to the West, but Closed to Scrutiny; Ukraine's Natural Gas Business Is a Mystery" [Business, Dec. 2]:

The article wrongly suggested that the identities of RosUkrEnergo shareholders are "hidden." The ownership structure of RosUkrEnergo (RUE) was declared publicly this year. For clarity's sake, the shareholders are Gazprom (50 percent) and Centragas AG (50 percent). I own 90 percent of Centragas; Ukrainian businessman Ivan Fursin owns 10 percent.





The article also questioned RUE's "transparency," although its financial performance is reported openly in RUE's statutory accounts filed in Switzerland and publicly in the statutory accounts of Gazprom. RUE's management accounts are prepared by Ernst & Young and its audits by PricewaterhouseCoopers. The contracts negotiated by RUE are reported almost daily in Kiev and internationally.

The latest negotiated agreements for wholesale gas supply into Ukraine are priced at $130 per 1,000 cubic meters for 2007. To the benefit of the Ukrainian market, this will be one of the lowest wholesale prices in Europe outside of Russia. Yes, Ukrainian gas prices have increased in recent years, but this should not be surprising as the gas-producing countries, among them Russia, Turkmenistan, Kazakhstan and Uzbekistan, seek to move toward the fully market-based pricing that exists in Central and Western Europe, and as Ukraine seeks to deal commercially with the European Union on a transparent and level playing field.

DMITRY FIRTASH


Vienna