The Stockholm arbitration between Naftogaz and Gazprom represents a dispute both singular and symbolic. It is the biggest-ever commercial arbitration case in the world and a truly great victory for Ukraine. At stake has been not only an amount of money which exceeds Ukraine’s GDP, but also our energy security, the ability to heat our homes and national dignity.
However, this dispute is far from over. Gazprom has refused to comply with the award and is challenging it, expecting that Ukraine’s domestic landscape will change. Russia is blackmailing us, threatening the loss of revenue from gas transit and a possible economic decline replacing whatever slow rate of growth we have been enjoying in recent years.
Many of our partners are confining themselves to pronouncements about their support for Ukraine and their deep concern over Russia’s actions. Our opponents keep trying to reverse the positive results achieved through changes in Naftogaz. I would like to share with you the details of what has been happening.
This arbitration case was part of systemic changes in the company. It was a protracted, complicated and risky process rather than a single eye-catching event. This story provides the general context of the process, letting you draw objective conclusions. I am sure many people will start seeing the victory in Stockholm differently.
This is my personal view of things, a first-person account. I hope this approach will make it more interesting for you. At the very least, it allows me to be candid in my assessments. The story is broken down into separate parts which can be read in isolation. However, following the general sequence is important for full understanding. I have sought to present an integrated analysis and to back up my conclusions with facts and figures.
This narrative makes it clear that we have won some important battles, largely because no one expected us to be able to do so. Sometimes. the battles looked more like successful guerrilla operations.
To win the war, however, we need to do more. Above all, we need to unite around a common goal. We need to move in the same direction – away from the abyss we have managed to claw our way out of, and towards energy independence and a developed economy. I will spell out the challenges which we will face and the action plan separately.
Thank you for your trust in and support for the Naftogaz team.
Key facts about Yuriy Vitrenko:
– Executive director of NJSC Naftogaz of Ukraine. Before returning to Naftogaz, he had been CEO of AYA Capital (an investment company) and COO at private equity fund Amstar Europe, a subsidiary of the US-based investment management company Amstar. He had also worked as Associate at the London office of investment bank Merrill Lynch and been a financial management consultant at the Kyiv office of Coopers & Lybrand/PricewaterhouseCoopers).
– Holds an MBA from INSEAD (France, Singapore).
– Got the jobs at international companies and financing of education abroad without help from his parents. His first part-time job, during a summer break when he was 14 years old, was as an assistant accountant at a commercial bank. At the age of 15, he enrolled in the Kyiv National Economic University, combining full-time studies with part-time jobs at various companies, which did not prevent him from getting his bachelor’s and master’s degrees with honours.
– After the Ukrainian Revolution of Dignity of 2013-2014, the newly appointed CEO of Naftogaz asked Yuriy to develop a defence strategy in the “gas war” waged by Gazprom, and then to lead its implementation. Among Vitrenko’s most important accomplishments are the successful arbitration cases against Gazprom which were resolved in accordance with the rules of the Arbitration Institute of the Stockholm Chamber of Commerce, as well as diversifying sources of natural gas which allowed Ukraine to eliminate its critical dependence on Gazprom. He initiated and successfully led implementation of projects on developing a competitive wholesale gas market in Ukraine and its integration into the EU market, as well as the project to bring Naftogaz’s corporate governance into line with international standards.
* Partner of the project “Naftogaz vs. Gazprom” – Yuri Vitrenko, executive director of the NJSC “Naftogaz of Ukraine”. Opinions and assessments published in the project materials may not coincide with the position of NJSC Naftogaz of Ukraine and the editorial staff of NV.