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Beginning of Meeting with Chairman of Gazprom's Management Committee Alexei Miller

January 14, 2009

Gorki, Moscow Region

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PRESIDENT OF RUSSIA DMITRY MEDVEDEV: Alexei Borisovich, what is the situation with the transport of gas via Ukraine? Have the Ukrainians taken any steps?

CHAIRMAN OF GAZPROMĺS MANAGEMENT COMMITTEE ALEXEI MILLER: Today, we received a draft agreement from Naftogaz Ukraine on conditions for restarting the transit of Russian gas via Ukraine. The only condition the Ukrainians put forward for restarting transit is that Gazprom deliver to Naftogaz Ukraine 360 million cubic metres of gas in January, 600 million cubic metres in February, and another 600 million in March.  

DMITRY MEDVEDEV: On what conditions?

ALEXEI MILLER: Without payment, that is to say for free. We are being asked to make a present of $700 million to Naftogaz Ukraine. 

DMITRY MEDVEDEV: Just to get supplies restarted?

ALEXEI MILLER: Yes, just to get supplies restarted. And there are no technological problems for Naftogaz Ukraine to get the supplies restarted. It can make up for the gas Ukraine stole from the export pipeline by using gas it has produced itself or gas from Ukraineĺs underground reservoirs, or it can buy this gas.

DMITRY MEDVEDEV: As I understand it, Ukraine has all of these possibilities for getting the gas flowing again through the pipeline system and resuming supplies, restarting transit. Is that correct?

ALEXEI MILLER: Yes, from the technological point of view there are no problems. Ukraine has all these possibilities. 

DMITRY MEDVEDEV: I see.

I have another question in this respect. In these circumstances Gazprom is also losing money, in particular in terms of lost earnings and profits. Have you calculated these losses, and how do you plan to compensate for them?

ALEXEI MILLER: Gazprom has lost $1.1 billion in export earnings since January 1. These are export earnings for contracts for gas supply to European countries. We plan to go to court to seek compensation for the losses we have established. 

DMITRY MEDVEDEV: You need to start organising the specialists in your legal service and also the law firms that represent Gazpromĺs interests straight away so as not just to take record of all the events (we have already organised this work) but also to calculate the losses. Our country, and one of its leading companies [Gazprom], cannot afford to lose this kind of money at such a time. The time for gifts is over. Compensation will have to be sought from the respondent, that is to say from those responsible for all of this lost money, all of these lost earnings.

Another matter that is particularly serious right now is that Ukraineĺs irresponsible and illegal, to put it frankly, actions have left a number of European consumers in a very difficult situation. The executive heads of these countriesĺ governments have arrived in Moscow today. Which countries have been hardest hit by Ukraineĺs actions? 

ALEXEI MILLER: Ukraineĺs actions to block the transit of Russian gas via its territory have affected above all Slovakia, Serbia, Bulgaria, Bosnia, Moldova, Macedonia, Hungary and Croatia. These are the countries hardest hit by the blockade of gas transit via Ukraine.

DMITRY MEDVEDEV: Almost the whole of Eastern Europe.

ALEXEI MILLER: Yes.

DMITRY MEDVEDEV: I will have a meeting with them today. This evening I will receive the heads of government of these countries, listen to what they have to say and give them a full explanation of the situation. We might also discuss some other possible ways of improving this situation. I will inform you afterwards of course.

Alexei Borisovich, I ask you to stay in constant contact with your Ukrainian colleagues and the other participants in the gas transport process in order to do everything necessary to get transit restarted, on conditions acceptable to the Russian Federation and to open joint stock company Gazprom of course. There will be no presents, but we need to get transit restarted on conditions that we can accept.


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