Topic: Russia-Ukraine Gas Conflict
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KIEV, December 3 (RIA Novosti) – Ukraine’s national energy company said Tuesday that it has agreed with its main natural gas supplier, Russia’s Gazprom, to defer payments for winter fuel deliveries to spring next year.
Naftogaz head Yevgeny Bakulin said his company has secured an agreement to delay settling debts for gas imported from October to December to give it more time to resolve unspecified “problems and issues in the regions”.
The apparent concession on payments from Russia’s state-owned Gazprom has been made against the backdrop of political unrest in Ukraine, where thousands of people have taken to the streets in a demand for the government and the president to step down.
The protests came in the wake of the Ukrainian government's decision to step back from signing a landmark trade pact with the EU, a decision widely seen as having been made under pressure from Moscow.
Russia vehemently denies using trade embargoes and gas deliveries as a form of intimidation against Ukraine and says it is only taking measures to protect its own economy.
Bakulin said that $765 million owed by Naftogaz for gas delivered in August would be paid soon, but that the work of government had been held up by the protests in the capital, Kiev.
He said the issue of the August debt had previously been due to be settled by December 7 and appealed to Gazprom to take the current situation into consideration.
In October, Gazprom complained that Ukraine had not settled an $882 million bill for natural gas for August and warned that it could in future begin demanding advance payment for the fuel.
That prompted Ukraine to announce it would stop buying Russian gas until the end of the year, which raised the specter of a possible halt of deliveries to Western Europe, only for Kiev to back down a few days later.
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Any response would likely boomerang on Russia – the partnership between Rosneft and ExxonMobil is a case in point. The United States has hit Russia with a third round of sanctions. This time the Americans went with a higher caliber weapon, targeting Russia’s biggest energy companies (Rosneft and Novatek) and banks (VEB and Gazprombank).