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OIL AND GAS
Europe wants more info on Natfogaz ties to Gazprom
by Daniel J. Graeber
Brussels (UPI) Jul 28, 2013


Moscow vows to appeal ruling in Yukos case
Moscow (UPI) Jul 28, 2013 - A ruling in favor of former shareholders in defunct Russian oil company Yukos will be appealed, Russian Foreign Minister Sergei Lavrov said Monday.

The Permanent Court of Arbitration in The Hague ruled Monday the Russian government is liable for around $50 billion in damages in the case against Yukos, disbanded in 2006.

Lavrov said after the ruling the Russian government and others involved in the case will use whatever legal means necessary to defend their case.

"The process is not over -- appellations are allowed," he said.

The court at The Hague ruled Moscow has to cover about half of the $114 billion sought in response to a decision by the Kremlin to seize the oil company.

Its former boss, Mikhail Khodorkovsky, was arrested in 2003 and convicted of tax evasion and theft in 2005. The company was then sold off, with most of the shares going toward Russian state-owned oil company Rosneft, controlled by Igor Sechin, a close ally of President Vladimir Putin.

Rosneft itself has been the target of sanctions against Russia's energy sector issued in response to Moscow's stance on crises in Ukraine.

A European energy administration agency said Monday the Ukrainian government needs to examine its contractual relationship with Russian energy company Gazprom.

The European Energy Secretariat sent a letter to Ukrainian Energy Minister Yuri Prodan calling for an assessment of the contract between Ukrainian energy company Naftogaz and Gazprom.

Parts of the contract, including the take-or-pay clause requiring Naftogaz to pay for a pre-determined volume of gas, serves to "prevent, restrict and distort competition on the natural gas market in Ukraine and affect trade in natural gas within the [European] energy community," the secretariat said in a statement.

Gazprom in June switched Naftogaz over to the new payment scheme because of $4.45 billion in overdue bills.

Russia supplies about a quarter of the European Union's gas needs, though most of those supplies run through the Soviet-era transit network in Ukraine. Debt disputes in 2006 and 2009 prompted Gazprom to cut gas to Ukraine briefly, causing regional energy shortages.

Russia this year offered some concessions to their Ukrainian energy counterparts, though the government in Kiev said it was wary of the Russian intentions. European officials have said the region's energy sector was subject to "political and commercial blackmail."

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