Ukraine's State-Run Energy Firm Near Bankruptcy: Prime Minister

KIEV, Ukraine -- Ukraine's state energy company Naftogaz is on the verge of bankruptcy and a special commission will be formed to try to save the group, Prime Minister Yulia Tymoshenko said Wednesday, Interfax news agency reported.

Prime Minister Yulia Tymoshenko
"The company is on the verge of bankruptcy," Tymoshenko was quoted as saying at a meeting with the company's new chairman, Oleg Dubina, who estimated the company's losses for 2007 at 5.0 billion hryvnia (1.0 billion dollars.)

"It is difficult to imagine that the country's key energy company has been brought to such a situation that it is necessary to form a government commission with emergency powers ... to try and put its finances in order," Tymoshenko was quoted as saying.

Tymoshenko, a western-leaning populist who replaced Russian-backed rival Viktor Yanukovych as prime minister in late December, has long criticised the management of the country's gas infrastructure.

A key export route for Russian gas to Europe, Ukraine is dependent on Moscow for its gas supply and Tymoshenko has accused her predecessors of agreeing to shadowy deals with Russian partners to appease the Kremlin.

Russia succeeded in forcing higher prices on Ukraine in 2005 after it cut off its supplies to the country.

The move caused disruption to gas supplies to western Europe.

In December, Ukraine agreed on another price rise for 2008, defusing a possible new dispute.

Russian giant Gazprom said Ukraine had agreed to pay 179.5 dollars (122 euros) per 1,000 cubic meters for gas deliveries following talks between Gazprom CEO Alexei Miller and Ukrainian Energy Minister Yury Boiko.

The price in 2007 was 130 dollars.

Source: AFP