Financial obstacles in Russia-Ukraine gas negotiations

Ukraine needs to pay its previous debt to Russia by the end of the year and pay in advance for getting new volumes of natural gas

Financial obstacles in Russia-Ukraine gas negotiations

World Bulletin/News Desk

Financial issues prevented an all-encompassing gas deal between Russia and Ukraine while they agreed on certain points at the meeting in Brussels on Tuesday.

EU's Oettinger mediated at the meeting between Russian Energy Minister Alexander Valentinovich Novak and Ukrainian Energy Minister Yuriy Prodan.

"Significant progress was achieved at the meeting between the energy ministers of Russia and Ukraine," said the EU Energy Commissioner Guenther Oettinger.

Another meeting is set for October 29 and Oettinger expects the parties to reach a total agreement then.

 "We achieved a certain degree of progress towards a possible solution; yet, the financial issue on the Ukrainian side needs to be resolved," Oettinger said. 

Both parties agreed that Ukraine will pay Russia $3.1 billion for its previous unpaid gas debt, $1.45 billion is to be paid by the end of October and $1.65 billion by the end of the year. The $3.1 billion debt was calculated at a rate of every thousand cubic meters costing $268.5, whereas prior to the meetings, Russia claimed that Ukraine's debt amounted to $5.3 billion.  

Ukraine will pay $385 for every thousand cubic meters of future flows of Russian gas but the volume still remains uncertain and will be determined if Ukraine pays in advance, Oettinger explained. 

"Until October 29, Kiev will try to solve its financial issues," said Oettinger.

Oettinger also said that Russia promised to pay Ukraine for carrying Russian gas into Europe.

Ukraine demanded €2 billion ($2.5 billion) from the EU to be able to pay its debt to Russia, and European Commission spokesperson, Simon O'Conner said they will discuss the issue with IMF in the near future.  


Güncelleme Tarihi: 22 Ekim 2014, 12:21

Muhammed Öylek