Naftogaz counts on cooperative work with MGU in line with memorandum of understanding

Naftogaz continues to work board of MGU in good faith and is surprised by the recent press statement of the company

Naftogaz continues to work board of MGU in good faith and is surprised by the recent press statement of the company.

MGU was created by the Cabinet of Ministers of Ukraine in November 2016 as a company to take over the function transmission system operator following the unbundling of Naftogaz. Unfortunately, the government did not decide on sources of funding for the new company and did not allocate sufficient funds for this purpose in the state budget of Ukraine. Instead, representatives of the government and supervisory board of MGU, the only governing body of the company formed so far, have asked Naftogaz to fund MGU.

Supervisory boards of Naftogaz and MGU have agreed a memorandum of understanding in July 2018 outlining ways for the two companies to cooperate in the process of the unbundling. The memorandum envisaged, inter alia, that members of the supervisory board of MGU will act as advisers to the supervisory board of Naftogaz on the unbundling. Based on the memorandum, Naftogaz offered draft employment contracts to the supervisory board members of MGU.

However, further discussions have made it clear that this option is not viable due to certain regulatory constraints and potential conflict of interest. The two boards are working on further steps aimed to unlock the cooperation process when the MGU issued its statement this week.

“We are deeply surprised and disappointed by the press statement of MGU. The unbundling is a crucial commitment for Ukraine and a priority project for Naftogaz. We are making every effort for the two companies to start working properly and co-operatively together. For unbundling to be a success it is crucial that MGU and Naftogaz work in good faith and focus on the unbundling commitments and the many complex and difficult tasks we have to complete by the end of 2019,” said Clare Spottiswoode, Chairperson of supervisory board of Naftogaz.

Corporate Communications Department
NJSC Naftogaz of Ukraine

Other news