Energy (in)dependence of Ukraine and Moldova: After association with the EU

Author: Anastasia Cucuruz, Ghenadie Brega (Republica Moldova), Elena Cernâșova (Ucraina)
25/04/2016 39452

The desire to join the European Union, voiced by Ukraine and Moldova, set the agenda of the authorities, including the issue of the system of purchase and supply of natural gas. Nevertheless, the assessment of the situation to date, carried out by a group of journalists from Moldova and Ukraine, shows that the market of gas in both countries still has some problems, and carries the risk of corruption. Embezzlement of public funds, key intermediary firms of dubious reputation, monopoly - these are the main features of the gas market in the two post-Soviet countries.

"Moldova to Russia’s pocket". How it all started

"Moldova – to Russia's pocket" - in 2002 such headlines dazzled known Moldovan newspaper "Flux", talking about the alienation of a controlling stake shares "Moldovagaz" in favor of the Russian "Gazprom". In the gas sector, Moldova has lost part of the property in 1998, when the Russian giant has received 50% of the share capital of "Moldovagaz". With a view to the restructuring of Moldova's gas debt accumulated yet, from April 1998, the Moldovan Parliament adopted the Resolution  № 1556 "On the reorganization and privatization of the gas in the Republic of Moldova", whereby half of the shares of the national supplier of gas was transferred to PJSC "Gazprom". This was possible due to the merger of JSC "Moldovagaz" and JSC "Gazsnabtransit".

Then, to find out the cost of the property of "Moldovagaz", it had to be done the assessment of the entire pipeline system. In accordance with Section 3 of the Government Decision № 1068, Department of State Property Management and Privatization planned to recalculate property Moldovan gas complex in 1999 through international audit companies. The main purpose of the revaluation was any changes in the share capital of JSC "Moldovagaz". Also re-evaluation could determine the correctness of transmission of "Moldovagaz" assets on account of debt. But this was not done until now. In other words, even today, it is unknown what should be the share of Moldova in "Moldovagaz" in fact.

It should be stressed that this situation is contrary to the law "On Foreign Investments" of the Republic of Moldova, namely article 9, paragraph 2, from 01.04.1992. According to the law, "all contributions to the charter capital of the enterprise with foreign investments are valued in accordance with the agreement between its founders on the basis of world market prices. Final assessment (not provisional, as was the case in reality) should be performed at the time of conclusion of the contract". A few years later, the Accounts Chamber audit has shown that the property value was understated then about twenty times. Subsequently, the data were presented in a report of IDIS Viitorul «Gas industry in Moldova: the burden of ignorance and error’s price", published in May 2007. Currently, PJSC "Gazprom" owns 50% of shares of "Moldovagaz", Public Property Agency under the Ministry of Economy of Moldova - 35.33% and the Property Management Committee of Transdniestria - 13.44%.

The Accounting Chamber and the activities of "Moldovagaz"

The last audit of the main supplier of gas to Moldova, carried out by the Accounting Chamber of the Republic, took place in 2000. Moreover, since 2009, the Accounting Chamber, even if wanted to, could not control the activities of JSC "Moldovagaz". The relevant law was amended in December 2008 and entered into force on 1 January 2009. It provides that the state can only perform an external audit of "operators, whose share capital is fully owned by the state, or the state's share in the capital of which exceeds 50%". This wording excludes companies such as «Moldovagaz», «Banca de Economii» and others, and, according to the vice-chairman of the Accounting Chamber Tudor Shoitu, allows poor management of state property, theft and misuse of budget funds.

"The authorized capital of one company is 100 million, of the other - 1.3 billion, as, for example,"Moldovagaz". Thus, we can check 60 million, but 600 million - have no right! Everything that happens in the energy sector, especially of "Moldovagaz", is alarming "- emphasizes Tudor Shoitu.

Only six years later, in the RM Parliament was proposed amendments to the Article № 28 of the Law on the Chamber of Accounts. The initiative, which was gathering dust on the shelves of the legislators, was represented by Deputies Iurie Leanca and Eugen Karpov, Stefan Cryange, and was approved by the Audit Chamber of the National Anti-Corruption Center. Only 17 March, 2016 amendments were adopted by deputies finally. After the changes take effect, the law will extend the powers of the state structures and the Audit Chamber can finally perform the external audit, enforce reduction in economic costs in companies, where the state has "at least 20% of the share capital".

On the other hand, there is another way in which the main supplier of natural gas in the Republic of Moldova can be checked by the state: "Such a control, Audit Chamber can do through NAER", - says Tudor Shoitu, noting that this initiative, however, was not supported and was even condemned by the European Energy Community. The reaction of EU representatives followed immediately after in the summer of 2015 the Chamber of Accounts in a formal conversation with NAER announced its intention to conduct an audit. As a result, after a short time, the European Energy Community started talking about a possible attack on the independence of the NAER (National Agency for Energy Regulation of the Republic of Moldova).

Such a reaction seems strange, since the Energy Community, which acts as a representative of the requirements and standards inherent in the entire European Union, does not see any problem in this situation in Romania. Thus, the Romanian Chamber of Accounts, for example, can perform procedures of Audit Authority for Energy Regulation, and that the EU is not perceived as an encroachment on the independence of the agency. In addition, such checks NAER in Romania, holds at least once a year, as well as in other autonomous public institutions, and the detected violations are always made public.

Officials report

The problems accumulated also in the gas sector of Ukraine. The main requirement of Euromaidan in Kyiv in 2013 was the signing of the Association with the European Union. Ukrainians have paid a high price for that association took place and came into effect. So on June 27, 2014 in Brussels, the President of Ukraine Petro Poroshenko has signed a historical document and completed years of the preparation and signing of the agreement. One of the priority items on the basis of which was developed and adopted strategy of development of Ukraine in 2020, is the issue related to energy trade, namely natural gas, crude oil and electricity. The association came into effect fully since January 1, 2016. But if the gas market in Ukraine has become transparent and less corrupt?

In its annual report on the work, published on December 15, 2015 on the official website of the Cabinet of Ministers, the then Prime Minister of Ukraine, Arseniy Yatseniuk praised the implementation of the new policy of energy independence by 95.7%. So, given that over the years has managed to increase gas supplies from Europe to 2.5 times, reduced supplies from the Russian Federation by 53%. Cabinet assures that eliminated intermediaries in the gas market: Ukraine buys gas directly from the EU partners, and from "Gazprom". Was reduced the amount of consumption of natural gas by 20.4% to 23.4 billion cubic meters. Significantly increased the volume of gas in storage facilities – on December 1, 2015 in Ukrainian underground storage facilities are of about 16.2 billion cubic meters of gas, which is more by 15.7% than last year. According to the results of 9 months of 2015 for the first time in 10 years, "Naftogaz Ukraine" has no damages. It was also carried out an independent audit of financial and economic activities of the organization. Also raised the rent on gas production and eliminated the so-called joint activities, used for the implementation of gas schemes.

At the end of 2015 Development Director of "Naftogaz Ukraine" Yury Vitrenko gave an interview to Ukrainian TV channels on the state of the gas market. In particular, Yury Vitrenko said that Ukraine managed to achieve independence from Russian gas over the past year and a half. "Now gas purchases are dictated depending on the price. If we, for example, see that the price of Russian gas is significantly lower than the European gas, we buy Russian gas. If we see that the price of Russian gas is higher or is on the same level as the European gas prices, we buy European gas ", - said Yury Vitrenko, noting that" Gazprom ", in spite of the many statements about discounts for the sister republic, actually supplied gas at a price significantly higher than for Europeans.

Yury Vitrenko also added that Ukraine remains dependent on imported gas, to reduce the dependence are developing options for increasing domestic production and reducing consumption, because Ukraine, according to the expert, "as well as any post-Soviet country badly energetically inefficient, we consume too much gas": "Our industry has significantly reduced gas consumption, largely because of the war. On the other hand, the population has reduced gas consumption due to the patriotism and because of economic considerations. To liberalize our market, we are moving gradually towards market prices for gas. Yes, this involves a significant increase in prices for the population, on the one hand, on the other, it leads to the fact that the subsidies that were previously hidden, provided in the form of discounts on gas, are now open and available to those who need it".

Ukraine: new rules - old schemes

In addition to actions of officials, in Ukraine were adopted a number of laws aimed at de-monopolization of the gas market, as required by the commitments, made after the signing of association with the EU. The government significantly increased its gas exports by reversal of Europe. For "Gazprom" has increased the price for the transit of the Ukrainian GTS. Controversial points of the gas contract in 2009 between Ukraine and Russia is considering by the Stockholm arbitration - the total amount of mutual claims is approaching the mark of 50 billion US dollars.

However, despite the cheerful reports of higher echelon officials, Ukrainian energy complex is still one of the most secretive and opaque. Currently in Ukraine there is a monopoly on the gas market, which is owned by "Naftogaz", which opens up great opportunities for the realization of corruption schemes. Monopoly is also the country's gas transportation system. Thus, in the opinion of the director of energy programs of the Center for World Economy and International Relations, National Academy of Sciences of Ukraine, ex-representative of "Naftogaz Ukraine" Valentyn Zemlyansky, globally in the country since the time of Maidan, the signing of the Association with the European Union, nothing has changed: the market is monopolized, and this is important for corruption - that is, if some company has agreed to approach the market with a key player "Naftogaz", then it will work, if does not agree, it will not work.

"Yes, we have adopted laws aimed at de-monopolization of the gas market and its liberalization, but so far it is only intention. Monopoly of "Naftogaz" is preserved, there is no market in the country. Market - this is when there is competition, and when there is a monopoly, it is not the market. Moreover in this situation the state is completely eliminated. Monopolists got complete freedom of action, backed also by the Memorandum of the IMF ", - stressed Valentyn Zemlyansky.

A former employee of "Ukrgasdobycha", analyst of consulting company "Nyufolk", Gennady Kobal says that in general the gas market of Ukraine today has a range of problems: "The government has made several steps that are not contributing to the openness and transparency of the market. For example, last winter, 150 largest private enterprises had to buy gas from "Naftogaz", which is a monopoly. It hit hard by the companies. After this decision was canceled. "Naftogaz" is the largest company in the gas market, the only one that buys gas from "Ukrgasdobycha". It turns out that one company buys gas, produces and transports ".

Monopoly = corruption

In our formal request to the company, "Naftogaz Ukraine" reported: in the middle of January 2016 the company contracted to 1.7 billion cubic meters of gas in five European companies by the EBRD loan. In December and January, the company conducted 27 procurement procedures, 17 were recognized conducted. Gas supplies are calculated to March 2016. The winners of the procurement procedures became Noble Clean Fuels Limited, Engie SA, Axpo Trading AG, E.ON Global Commodities SE and Eni trading & shipping S.p.A from among 11 suppliers, who have previously passed the pre-selection process by the EBRD standards. The main criterion, on the assertions of the representative of "Naftogaz" is the lowest price that ranged from 188 to 211 dollars per thousand cubic meters of gas. In addition, "Naftogaz" contracts and their own money to European companies, but the representative of the company did not provide details. The heating season 2015-2016 in Ukraine has passed without the purchase of gas from Russian "Gazprom".

It should be noted that four of these companies are for a long time in the energy market in Europe, have a good reputation. But the company Noble Clean Fuels Limited is an offshore, registered in the UK, but the headquarters, according to an open database, is located in Hong Kong. But it's not only that. The company is a subsidiary of Hong Kong's major company Noble Group, which since 2008 has been working in Ukraine. A subsidiary of the company in Ukraine is also "Noble Resources Ukraine", which from 2008 to 2013, headed by the present MP from the "Samopomich" Ivan Miroshnychenko, as indicated in his official biography. His candidacy in December 2014 was lobbied for the post of Deputy Prime Minister by the former Prime Minister Arseniy Yatsenyuk, stressing that the key points of growth of the Ukrainian economy is the agricultural sector and the energy, and Miroshnychenko is suitable for the post of Deputy Prime Minister. And in early 2015, the company Noble Clean Fuels Limited becomes the supplier of reverse gas.

Another scandal with gas suppliers in Europe is associated with the company Trail Stone, which broke out after the performance of odious people's deputy of Ukraine Yulia Tymoshenko. So, in October 2015 with the Parliament rostrum leader of the "Batkivshchyna" said that Ukraine buys gas from company Trail Stone, at a bigger price than on the stock exchange: "I have now in the hands a document with stock quotes that with the advent of government-established company Trail Stone, which is represented by Ukrainian citizen Pavlo Levin, who has a direct relation to the leadership of" Naftogaz ". And the strange circumstance that this company sells imported gas in Ukraine is more expensive than the stock exchange quotations".

It should be noted that the company Trail Stone, which is a US company Riverstone Holdings LLC, was established in 2013, has offices in Berlin and London. Gas supplies to Ukraine are engaged in the German branch of the company. On the web-site of Trail Stone, in the list of contacts, indeed there is Pavlo Levin, whom we asked to comment on the statement of Yulia Tymoshenko, but he ignored the letter.

The fact that the company has a powerful lobby of the former Ukrainian Prime Minister and holds a leading position among suppliers of natural gas in Europe, became known last summer. So, after returning from an investment conference in Washington in July 2015, Yatsenyuk said: "In the energy sector also have signed a memorandum with the European division of the US Company Riverstone to increase purchase volumes of natural gas for the needs of Ukrainian industry and the needs of the Ukrainian economy".

Prior to that, the head of management of European integration of the Ministry of Energy and Mines Michael Bno-Ayriyan noted that TrailStone in the first quarter of 2015 was the third in terms of company-supplier of natural gas from Europe to Ukraine. "There may be gone some companies, but there is no market mechanism. First of all, you need to change the approach. It should work Antimonopoly Committee. "Naftogaz Ukraine", "Ukrtransgaz" are monopolists in the market. For a company to enter is needed to somehow transport gas, that is to bypass them is impossible. If European companies are complaining, it is possible that the mechanism will be changed "- sums up the lawyer Andriy Leshchenko.

Politics, populism and gas tariffs

Haven’t waited for de-monopolization of the market and consumers in Moldova. Another difficult issue is the topic of increase of tariffs for energy, which in both countries becomes the subject of controversy demagogic polemic of politicians. Thus, the increase in tariffs for natural gas for just one Moldovan ban, provide JSC "Moldovagaz" additional income of nearly three million lei annually. In these circumstances, the passions around the idea of ​​changes in tariffs have always been extremely tense. The promise of lower tariffs could provide "political capital" of a party, while the increase, even justified, in a poor country, as a rule, is absolutely unpopular. This trick is widely used by the Moldovan politicians, who have repeatedly stated that in the talks with the representatives of "Gazprom" have made the price reduction. And it is during that time, as the largest supplier of natural gas shows in their reports that the formula for calculating the tariff for sale of gas to Moldova has not changed for over eight years. The price is calculated on a quarterly basis at a fixed algorithm, so that the reduction takes into account only the changes in the index of prices for diesel fuel and heating oil.

The latest report, published by "Gazprom", also shows that the price of imported natural gas to Moldova in the fourth quarter of 2015 was significantly lower than it was announced by the Ministry of Economy for the same period. The same applies to the average gas import price. So, while the Ministry of Economy announced the estimated cost of $ 204 per thousand cubic meters, the Russian giant's report shows that the import price in the fourth quarter of 2015, in fact, was $ 181.29. In turn, the Ministry of Economy says that the difference is due to the fact that, according to the contract with "Gazprom", the estimated price of gas is fixed quarterly January 1, April 1, July 1 and October 1. The press service of the Ministry of Economy said that the real price was 185.34 dollars in October, November - 183.97 and 184.31, US dollars per thousand cubic meters in December respectively. Currently, Moldova imports gas from Russia under a contract between "Moldovagaz" and "Gazprom" from December 29, 2006. Its validity is actually expired on December 31, 2011. Since then, the document periodically is simply prolonged. 

Echo of "Furduy’s amendment”

The law, known as the "Furduy’s amendment", is one of the largest legislative changes that directly affect the rates for gas, primarily for end-users. The amendment is named after the former MP of the Liberal Democratic wing, who propelled it into parliament in 2014. The innovation lays on the shoulders of the Moldovan consumers all costs for the transit of Russian gas to the European Union. This initiative is still questionable for the reason that the Liberal Democrat Simion Furduy for over ten years has business in the area of ​​gas supply. He was in 2002-2003 the chairman of JSC "Moldovagaz" and later the director of "Gazenergomontazh" LLC.

As a result of the amendment for the transit of gas through Moldova pay both Moldovan citizens and concern "Gazprom". Thus, after the entry into force of the law, the price of gas transportation service routes are not divided by 20 billion cubic meters, but only one billion, so that the transit is no longer fall under the regulation. Under these conditions, according to the former head of NAER Viktor Parlikov, the amount paid by the citizens of Moldova to maintain the gas transit system of Russia was about 300 million lei annually.

The proposal to abolish the amendment also came from the Liberal Democrats. We are talking about the deputy Stefan Cryange, who is the chairman of the Parliamentary Committee on Budget and Finance. The law, which abolished "Furduy’s amendment», was adopted in the final reading in Parliament on November 20, 2015, after which the document was approved by President Nicolae Timofti about two weeks after the vote in parliament. However, it gained legal force only after a month – December 18, following the publication in the "Monitorul Oficial" - the official gazette.

A simple calculation shows that for a time, until the amendment was in force, consumers paid an extra 800 thousand lei per day, to cover the costs of transportation of gas to some EU countries. "All deviations will be included in future rates. I am absolutely sure that the person, who proposed the law, knows what it contains. The remaining 50, or so, MPs, who voted - it is their problem, if they did not understand, had to ask. Nobody asked me what it meant, "- emphasizes Viktor Parlikov, now an expert on Energetics in IDIS Viitorul.

Indebtedness of deputies on the way to EU

Safety and energy efficiency, independence, transparency and predictability of the market - the most important principles of the Association Agreement with the European Union, signed by both Moldova and Ukraine. Since the signing of the document were adopted the relevant commitments by signatory States. In addition the authorities of both countries need to focus their activities in order to ensure the competitiveness and access to energy security, sustainable and affordable energy market in Europe.

And while the politicians talk about European integration, which every citizen will feel in the near future, experts say that the MPs delay the adoption of several important laws, without which integration script is just empty words.

The issue of energy security has at least three regulations of the European Union, for which expired defined for implementation in the Moldovan legislation. Namely, it is Directive 2009/73 / EC of the European Parliament and Regulation 715/2009 of the Council of the EU. On July 13, 2009, they were to be taken, and then implemented by Moldova until January 1, 2015. It is a question also of Regulation 994/2010 of the European Parliament and the Council of EU, which the authorities have pledged to move in the legal inventory of the Republic of Moldova until December 31, 2015. Without them, it would not be possible to implement not only the general rules of the EU and Moldova on the part of the natural gas market, but the regulation of the conditions of access to the gas transportation networks.

Although Moldova has signed an association agreement with the EU, and the document requires the adoption of directives till December 31, 2015, but in early 2016, not all legislative acts were adopted. Thus, even in 2014 with the support of the Energy Community Secretariat, the Moldovan authorities have developed a new draft law on natural gas. Almost two years later the law was finally approved by the Cabinet of Ministers on October 28, 2015, and since then, no progress in this matter. Thus, it was ignored as the obligations to the European Union and obligations at the national level provided for in the legislative program adopted in July 2015, which the Democrat Adrian Candu has signed.

It should be noted that the new law is to break the monopoly in the gas market and new suppliers will have access to the pipeline. In addition, in contrast to the current legislation, the project includes a number of commitments, which takes up the gas distribution system operator. So, he may charge a fee for the right to use the network belonging to him, but would not have the right to refuse entry to the market of new producers or suppliers of gas. The independence of the de facto operator of the pipeline, not just law, as provided by current law on gas, is a key condition for the operation of the pipeline Iasi-Ungheni. On August 14, 2014 in Bucharest, was signed an agreement, providing that a pipeline in Moldova will be in management of "Vestmoldtransgaz" state enterprise, while in Romania - the company "Transgas".

According to the latest analysis of the energy sector of the Institute of Policy and European reforms in Chisinau, close to the rest of the approval of the new law on natural gas, the government should hurry up and approve legislation to implement it. In total, there are 43 EU directives and regulations in the energy sector, which Moldova pledged to integrate into national legislation. In early March, the government in cooperation with the Moldovan parliament has prepared and approved a plan of priority actions to be taken to accelerate the implementation of the Moldova-EU association agreement. The document is a list of actions, commitments and timetables for the various activities, including in the energy sector. The adoption of the Natural Gas Law was planned for the end of March, so in April the current government could develop a roadmap for the liberalization of the gas market. But the vote is still delayed.

Debt in almost five billion dollars

But in Moldova there is a significant moment in the gas issue, by means of which the Russian authorities are blackmailing the republic, not allowing the integration of the energy market in Europe. Today the company "Moldovagaz" owes "Gazprom" of about five billion USD, 90% of which belongs to the left side of the Dniester River, that is Transnistria. Repeatedly national and international courts have made decisions that confirm the need to repay debt, but they are not enforced. "Moldovagaz" continues to deliver Transnistria almost twice more gas than it consumes territory, controlled by Chisinau authorities. Not the exception that for this gas Moldova will never get the money.

At the same time, the debt is constantly growing, and it gives "Gazprom" the ability to keep Moldova in absolute zone of influence. Among the risks, associated with the use of natural resources, as a political tool performs the threat from "Gazprom" of the termination of deliveries of natural gas, or the capture of gas distribution networks in the account receivable – scripts, previously used by Russian supplier. The situation is complicated by the fact that the separatist region of Transnistria, which is home to about half a million people, consumes more natural gas than in the area of ​​the right bank of the Dniester. Thus, the National Bureau of Statistics shows that the number of resident population of the Republic of Moldova is more than 3.5 million people. July 1, 2015 the debt of "Moldovagaz" to "Gazprom" amounted to 4.85 billion US dollars, of which more than 4.35 billion of "Tiraspoltransgaz" debt.

Such a high consumption of natural gas, given the small population of the region, can have only one explanation: the unpaid gas is used for electricity production, which subsequently sold to the Republic of Moldova. This opinion was expressed by the expert in the field of energy, Sergiu Tofilat. In response to the request, made by the separatist authorities to clarify the situation, we have given up after a month of standby. The document is signed by the director of "Tiraspoltransgaz". In particular, the response means that the data on the volumes of gas consumed in industry and households is "a state secret or confidential information".

The same answer was to the question about the source of gas imports and information on gas tariffs for consumers in the region, although this information is published on the official website "Tiraspoltransgaz", representatives of the Transnistrian authorities again referred to the fact that the information requested is confidential. The same questions were addressed to the so-called Ministry of Economy of TMR, but there is no answer, and it's been more than 3 months.

The situation in Transnistria is described by the head of public organization "Union of Ukraine Transnistrians" Oleg Khvoshchevsky: "There people for allegedly free gas, which is supplied by Russia, paid a lot of money. They pay more than people pay for gas in Ukraine. The money goes to the local government, local princeling, who uses them for his own needs, buys home-steamers. Everybody knows it. Debt grows, but it grows out of nothing - people pay. It is a fraudulent system. They get bills, pay to the local budget money. And to complain about the situation they have no one - it is a bandit state".

According to the contract of 2009, the transit of gas, which Ukraine has concluded with the Russian Federation, in addition to European consumers, Russian gas is supplied through the Ukrainian gas transportation system to Moldova, the gas receiving items listed are those that are on the territory of Transnistria. So, in response, the head of the press service of "Ukratransgaz" Maxim Bilyavsky said that to Moldova, through Ukrainian GTS, 2.9 billion cubic meters of gas was transported last year. Thus, the Republic of Moldova is dependent on the rebellious under the influence of propaganda and is not currently controlled by official authorities of Moldova region, not only politically, but also the energy sector. It is enshrined in an official document, in fact recognized by the Moldovan authorities and is being implemented for many years. And the company "Tiraspoltransaz" has a direct relationship with Russia. For example, on a page in Wikipedia on the TMR economy in 2014, the company "Tiraspoltransgaz-Transnistria" took 7th place in terms of revenue in the budget of the unrecognized republic, as well as owners indicated TMR Government and "Gazprom" RF.

Outstanding court decision

In March 2015, once again the Russian company "Gazprom" threatened to cut gas supplies to Moldova because of accumulated debts. The measure is not new, in fact considered several lawsuits for recovery of debt in recent years. At the national level, it was issued three decisions of the Bender court, obliging "Tiraspoltransgaz" pay off accumulated debts. The first decision of the Bendery Court dates back to September 2013. The judge Arina Ilanzhi made a decision on repayment of debts in the amount of approximately $ 1.5 billion in favor of the "Moldovagaz". Documents reception signed between "Moldovagaz" and "Tiraspoltransgaz" confirm maintenance of about 5 billion cubic meters of gas in 2010-2012. The Bendery Court of Appeal (Transnistrian city) also ruled in favor of "Moldovagaz", forcing "Tiraspoltransgaz" pay also a fine of $ 75 million.

And these two claims in October 2014 and December 2015 were won by "Moldovagaz" in Bendery court. We are talking about debt in the amount of 900 million US dollars and, respectively, 600 million, that the company "Tiraspoltransgaz" is obliged to pay "Moldovagaz". Decisions are final; they were not challenged in the Appeal Court of Bendery within the period, prescribed by law. According to the expert in the field of rights Roman Zadoinov, the final decision of the court must be presented for implementation within three years: "If the decision is final, but its performance cannot be realized later than three years from the date of the judgment, it is no longer valid. If the decision has been presented for execution in three years, you can then enter another term for the execution of the judgment".

However, in accordance with the contract for the supply of gas, signed in 2006 between "Gazprom" and "Moldovagaz", the judicial settlement of potential conflicts may take place only in the International Commercial Arbitration Court at the Chamber of Commerce of the Russian Federation. Until now, international arbitration, "Gazprom" has won at least 10 cases against "Moldovagaz", after which the company is obliged to return the historical debts for gas. While that may not have started the procedure of execution of court decisions, the former head of NARE Viktor Parlikov states that collect debts from "Tiraspoltransgaz" will be possible only when Moldova takes any important political decisions without coordination with the Russian Federation.

"Gazprom" is more than a private company. If it would behave as a private company, there would be no such problems, but often "Gazprom" behaves as the economic expansion of the RF Ministry of Foreign Affairs. When you play a purely economic role, you are focusing on the maximization of profit. When your role is as an instrument of policy, you are responsible for policy, "- expressed his opinion Viktor Parlikov.

However, not all debts for natural gas will have to pay to "Gazprom". So, in December 2005, "Gazprom" has signed an agreement on the assignment of debt, passing the US $ 1.2 billion in favor of Ltd. "Factoring Finance". This action has not been agreed with the authorities in Chisinau, for this reason, they refuse to accept it even on the level of declarations. In accordance with the contract, Ltd. "Factoring Finance" has committed to pay to "Gazprom" until 30 December 2005, the amount of debt. Subsequently, in the financial statements of "Gazprom" for 2005, on page 39 noted that the company "Factoring Finance" has paid the full amount.

If we do not supply gas to the left bank, they will steal?

An expert in the field of energy, Sergiu Tofilat is one of those, who demanded an explanation from the government agencies in regard to "Moldovagaz" debt to "Gazprom". Together with a number of civil society activists, he made the petition, which was later signed by about four thousand people. He appealed to the Ministry of Economy with a list of questions about the situation in the gas sector. In response, Deputy Minister of Economy Valeriu Triboi acknowledged that constitutional authorities cannot afford to operate on the left bank of the Dniester.

"If we do not enter into a contract for the supply of gas between "Moldovagaz "and "Tiraspoltransgaz", there is a risk, and it is technically possible, the company, using the geographical position, can withdraw the gas illegally, since the transit pipeline in the direction of the Balkans on the border of Ukraine- Moldova, it is not under the jurisdiction of the Moldovan authorities ", - stated in the reply of the Ministry of Economy.

Economy Ministry also claims that it has no information that the natural gas used by the Moldovan Power Station to produce electricity is included in the debt of the unrecognized republic of Transnistria company "Moldovagaz", "because Kuchurgan power station is not under the jurisdiction of the Republic of Moldova authorities". However, it should be noted that "Tiraspoltransgaz" has a successful business activity. So, on the company's website states that it sells gas equipment, working with companies from Russia, Ukraine, and Italy. In particular, it established contacts with Ukrainian company "Atem-Frank" and "Zhitomirteplomash".

In fact, these Ukrainian companies are interconnected – on the "Atem" web-site as contacts provides enterprise "Zhitomirteplomash". The company is engaged in making and selling heating equipment.  We contacted representatives of "Atem" and clarified: is it possible to buy their products in Transnistria, and received an affirmative answer. Thus, the Russian company "Tiraspoltransgaz-Transnistria" collects payment for gas from the TMR population, leads business, pay taxes to the treasury of the unrecognized state. A debt is hanging on Moldova. On the possible funding of the separatist regime at the expense of Russian gas in the Russian media said since September 2013. Then journalists from television TVRain showed that the self-proclaimed Transnistrian authorities have created a "stabilization fund", which is formed from the sale of Russian gas to the population. Later, in 2015, the existence of this fund was confirmed by of the leaders of the region.

Offshore intermediary companies

Not everything is clear with electricity production in the TMR. Thus, revenues from electricity sales, presumably produced from natural gas, for which is not paid "Moldovagaz", leaked to offshore companies. Prior to 2015, it was known that Kuchurgan plant that supplies electricity to the residents of Moldova, had a contract with "Union Fenosa" and mediator advocated state-owned company "Energocom". From January 1, 2015, the constitutional authorities announced the existence of another intermediary - the company "Energocapital", which is based abroad in the two offshore companies. Director of "Energocapital" is Mikhail Dobrov, which in recent years has been the administrator "Dnestrenergo" - state-owned company in the unrecognized republic. From the documents it is clear that "Energocapital" was registered in October 2014 - just two months before inclusion in the scheme. According to local media, this company has only one employee, as well as a license to operate the company received in record time - just three days.

Companies that established "Energocapital" are "Bas Market" with the office in Tiraspol and «Ornamental Art Limited» in Hong Kong, China. Founders of last lost in other offshore: «Prosper Trading Limited» in China and «Energy Assets Development LP» in the UK, and the director is listed Shum Way Lap. According to one of journalistic investigation, published on, the company «Energy Assets Development LP» has moved to a new address - 18/2 Roystons Mains Street, where the registered and «Fortuna United Ltd» - a company that, according to the report of the company Kroll, took direct part in the robbery of "Banca de Economii", "Sotsiale Bank" and "Unibank" in Moldova. In particular, the company, whose owners are registered in Seychelles, has received loans worth 825 million euros, which has not returned to this day.

According to the expert on energy issues from Romania Otilia Nutsu, in these conditions, beneficiaries are people, whose names are difficult or even impossible to find, most likely these are the citizens of Russia, and moreover in the future dependence of Moldova from the Russian Federation will only increase.

"Moldova pays for electricity much more than we pay in Romania. I mean, our wholesale prices are 40-42 euros per megawatt-hour, and Moldovans pay 65 euros per megawatt-hour. Although they pay this amount of money is not used to pay for the consumed gas in electricity production and flow away in offshore companies. Shareholders of the company, nobody knows. It is possible that the Moldovan citizens are actually paying for companies that are either owned by the separatist authorities, or Russian citizens." - said Otilia Nutsu.

The NARE to a request to show the documents, establishing the company "Energocapital", we were told that they were seized by prosecution, it is not clear for what purpose. In the State Registration Chamber, it was found that the power of attorney, which is dated 17.10.2014, has been issued in the name of Valery Andryushin, he had to submit the documents to the State Registration Chamber. And it was found out an interesting detail: "Take" - the company name, which was changed in "Energocapital" structure.

It should be noted that the distortion of the name of the company, says economist Dumitru Alayba, - a practice, used to be able to avoid responsibility in the event of a court case: "For the first time such a ploy was seen in raider attacks to "Moldovaagroindbank" in 2011, as well as in other cases. They do it on purpose, to have access, in which case, the responsible officer had a bureaucratic excuse. Subsequently, it can be said that he believed that this is other company. If NARE wants to solve the problem, I think that it has sufficient grounds to annul the permit to operate: there is conflicting information about the name of the company and non-transparent data about offshore founders. Plus, all of the above reasons, and in a normal country, this means that there is a problem, "- says Dumitru Alayba, the economist and former head of the Secretariat of the Economic Council.

According to the extract from the annual report on execution of the budget of Transnistria, in the last two years the company "Energocapital" - the third among the largest taxpayers in the region. 

The investigation is a part of the Anti-Corruption Initiative Moldova-Ukraine project implemented by the Center for Investigative Journalism of Moldova, the Institute of Mass Information and Freedom House with support from the Canadian government.

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