Ukraine's Naftogaz posted a $1.4 billion net profit in 2017, the highest in its 20-year history thanks to its success in the arbitration case against Russia's Gazprom, the company said on late Tuesday.
Naftogaz said it remained Ukraine's biggest contributor to the national budget in 2017 for the second consecutive year.
The company said 'the historical victory' in the Stockholm arbitration process was a key factor underpinning Naftogaz’s profitability.
'Years of hard work finally resulted in the historical Stockholm Arbitration victories in December 2017 and February 2018. We managed to eliminate the risk of an unprecedented debt burden from the country’s shoulders and were awarded almost $4.7 billion in compensation,' said CEO Andriy Kobolyev.
In line with the results of the two arbitration proceedings, Gazprom must pay Naftogaz $2.56 billion, adjusted to a $2.1 billion set-off for gas delivered in 2014.
The company added that last year's record profits were also possible thanks to an increase in gas production, better conditions for transit growth, efficient debt enforcement, and the newly-introduced procurement system for gas purchases.
In March this year, Naftogaz announced a public bid for project management services to transform certain Naftogaz activities, including the facilitation of unbundling of gas transmissions.
'Naftogaz is actively supporting the reform of Ukraine’s gas market with the view to liberalize it for further integration into the EU market and is making every effort to increase Naftogaz group’s value, efficiency and transparency. This requires wide-scale initiatives to ensure compliance with European and Ukrainian law, improve the company’s operations and maximize the value of the group’s assets,' the company explained.
By Murat Temizer
Anadolu Agency
energy@aa.com.tr