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Republic of Moldova is willing to pay a little over 1% of the debt to Gazprom

14 September 2023
General Interest

Republic of Moldova is willing to pay a little over 1% of the debt to Gazprom, despite the financial claims of the Russian company. Chisinau authorities recognize only 8.6 million dollars of the total bill of 709 million dollars calculated by the Russian gas supplier, said the Moldovan Minister of Energy, Victor Parlicov, according to Agerpres.

He also claimed that the Republic of Moldova could request compensation from Gazprom for not honoring the contract it had concluded with Moldovagaz, as a result of the unilateral suspension of deliveries.

“In October 2021, when Gazprom practically gave up, refused to sign a long-term contract and we had no other source of supply, gas supply, there was no other contract, there was not even the experience of working with other markets, during the negotiations for the signing of a longer-term contract, it was agreed between the Republic of Moldova, represented at the time by Deputy Prime Minister Andrei Spînu, and the Russian side (…) the signing of a kind of protocol in which the parties agreed to several elements which covers not only the contract, but also certain things at a more political level. One of these elements that was introduced in this protocol, at the request of the Republic of Moldova, was the performance of an audit, because Gazprom insisted that: “you have a debt, we calculated it in accounting, 700-800 million dollars. Pay!”. We are not interested in how much this debt is, but what is its nature, what are the reasons, where did this debt come from and how much the consumers of the Republic of Moldova or the state of the Republic of Moldova have to assume. How much of this debt must the state assume and what must the shareholders assume?

Gazprom controls 64% of Moldovagaz shares. Why when a company where Gazprom owns 64% of the shares is in debt to Gazprom, and the payment must be made by the consumer from the Republic of Moldova, in full, all the debt? That’s why we wanted to make this differentiation, to understand how much of this debt is due, so to speak, to the intervention or non-honoring of certain obligations by the Republic of Moldova as a state and how much of this debt must be summoned including by the shareholders and resolved between the shareholders. The conclusions of this audit were as follows: the amount of debts varied from day to day. The last reference date was the end of March 2022. At that time, the debt represented about 709 million dollars in accounting, of which the auditors found that for 276 million dollars, neither Moldovagaz nor Gazprom, which were requested to present the information, they could not present confirmatory documents, where this debt came from. That’s all the debt accumulated from the 90s to 2003, with another $400 million having expired, being statute-barred. The deadline for payment of these debts has been exceeded. Gazprom did not do the necessary procedures to keep this debt valid. And then we proposed, normally, that these debts be written off,” he said.

“Furthermore, elements were identified that Moldovagaz could submit in relation to Gazprom, certain actions, including financial claims related to the violation of certain contractual provisions or certain behaviors that, let’s say, go beyond typical contracts of this kind. For example, when transiting gas on the territory of the Republic of Moldova, Gazprom does not pay, as is the basic rule, the transport price to the transport operator from the Republic of Moldova at the established rates. He did not contract with the licensed carrier, but he was splitting the money, 50% for the left bank, 50% for the right bank. From these divisions, we calculated that we could submit financial claims to Gazprom of about 160 million dollars.

Moreover, last year, for example, starting from October, Gazprom stopped delivering the volumes of gas that we contracted under the mandatory conditions. That is, we did our part, we honored our debt, we paid on time, and Gazprom, when the necessary volumes were requested for the months of October, November, December, etc., unilaterally reduced these volumes, violating the provisions of the contract.

We haven’t quantified what those claims might be, but what we’re proposing in this debt settlement agreement is actually this: we’re paying $8.6 million, which, as I said, is just over a percentage of the amount of debts that was requested by Gazprom and, under these conditions, we close all questions, including giving up the financial claims for the violations committed by Gazprom. That was our proposal. Now the ball is in Gazprom’s court. We expect a reaction from them, including a documentary, beyond press releases. Next, follow the procedures, let’s see how we do. I believe that we already have a good basis to put an end to this history and finally solve the problem of this debt,” also said Parlicov.

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