The Moldovan government proposes to pay $8.6 million of Moldovagaz's alleged debt to Gazprom and to write off about $700 million.
This was announced by Energy Minister Victor Parlicov, who at a press conference on Wednesday presented the results of the audit of Moldovagaz's debt to Gazprom, conducted by the international companies: Norwegian Wikborg Rein Advokatfirma AS and British Forensic Risk Alliance & Co, chosen for their impeccable reputation. Their report was also published on the Energy Ministry's website and sent to Moldovagaz for examination by the Supervisory Board and the majority shareholder, Gazprom, along with the government's proposals to solve the problem. According to Victor Parlicov, the international auditors stated that Gazprom claims to collect from Moldovagaz a debt of $756 million (as of October 31, 2021), including the estimated current debt obligations, of which Gazprom requested to collect $709 million as of March 31, 2022. As Victor Parlicov explained, the recognition of this alleged debt by Moldovagaz would mean that each family in Moldova, connected to natural gas, would owe about $1,000. The head of the Energy Ministry specified that, according to the audit results, most of this alleged debt has not been confirmed or, at least, is unenforceable, uncollectible. According to him, in particular, there are no supporting documents for the debt of about $276 million. That alleged debt may have accrued between 1991 and 2002. Although the auditors have repeatedly requested supporting documents, Gazprom has not responded, although in accordance with international best practices it is in the interest of the creditor to document the existence of the debt. Victor Parlicov pointed out that, at the same time, the documents found in relation to this alleged amount indicate that almost 50% of it represents penalties for non-payment, some of which resulted from the application of excessively high interest rates in market conditions of approximately 0.35% per day. Another alleged debt, worth about $400 million, has expired, both under the Moldovan and Russian legislation, as the arbitration awards for these amounts were issued in 2008-2020 and cannot be enforced after the expiration of the 3-year term. The Energy Ministry head specified that, moreover, the sum of $135 million was spent by Moldovagaz without ANRE's approval. This amount includes: $32 million for the construction of a new office on Puskin Street in Chisinau; $46 million in gas losses in the network; $23 million as unapproved investments. Victor Parlicov emphasized that, in its turn, the Moldovan government, which is a shareholder of Moldovatransgaz, can make a number of financial claims against Gazprom, which has not duly paid about $160 million for gas transit through Moldova since 2007. Although Moldovatransgaz (a company owned by Moldovagaz) is currently the only licensed system operator in Moldova, Gazprom paid only half of the transit fee to Moldovagaz and the other half to Tiraspoltransgaz, an enterprise created by the Transnistrian authorities. This distribution of fees does not comply with the transit contract and international practice. At the same time, the government is currently assessing the damage caused by the failure to deliver the contracted and requested volumes of natural gas in the fall-winter of 2022-2023. The head of the Ministry of Energy specified that, in addition, international auditors confirmed the information announced earlier, but it did not attract the attention of law enforcement agencies regarding the fact that since the establishment of the joint Moldovan-Russian enterprise a number of actions have been taken that raise questions about their legality. For example, it concerns a significant underestimation of the value of gas transportation networks transferred by the state in the 90s to the capital of Gassnabtransit, the predecessor of Moldovagaz, on account of the alleged debt of $50 million. The networks were transferred at the balance price, not at the market price in the conditions of galloping inflation of the 90s. Moreover, the debt of the left bank of the Nistru River was allegedly repaid with this amount, not the alleged debt of the right bank of the Nistru River. Victor Parlicov said that as a result, the Moldovan government, as a shareholder, offers Moldovagaz to pay 153 million 573 thousand lei (which is about $8.6 million at the current exchange rate) of the debt to Gazprom, and Gazprom to write off the rest of the alleged debt. While answering journalists' questions, the head of the Energy Ministry said that most of the alleged historical debt of Moldovagaz to Gazprom for gas consumption by the right bank of the Nistru River cannot be confirmed by documents or cannot be fulfilled. According to him, there are procedures for confirming debts that have not been properly followed by Gazprom. "Acceptance acts, reconciliation acts are signed between the companies. These documents are there. But in addition to accounting procedures, there are legal procedures. "Gazprom has not implemented them to confirm the debt," Victor Parlicov emphasized. He noted that the Moldovan side and Moldovagaz may make financial claims against Gazprom because of the violation of the procedure for the distribution of revenues from gas transit through the territory of Moldova and the failure to fulfill the obligations on the volume of contracted gas supplies in autumn and winter. According to him, the damage thus caused to the Moldovan side has not been assessed yet, and the amount of damage will be named later. "We propose to pay $8.6 million to Gazprom at this stage and close the topic of the historical debt. The audit materials should be approved by the Supervisory Board of Moldovagaz. Discussions will take place there. We are waiting for Gazprom's reaction," Victor Parlicov said. He stressed that if the results of the international debt audit are not approved by the Moldovagaz Supervisory Board and are not recognized by Gazprom, the Moldovan government's position will not change. "This audit serves as a basis for the Moldovan government's position. There is a high probability that the audit results will not be approved by the Moldovagaz Supervisory Board, but the government will not forget what is written in these documents and will not change its position, which will be based on the audit materials. It will be the basis for further negotiations," the Energy Ministry head said. According to him, it is premature to talk about possible litigation with Gazprom. "There are options. We have to wait for Moldovagaz and Gazprom's reaction," Victor Parlicov said. He believes that Gazprom's attitude towards Moldova should be looked at wider than just commercial relations, as the Russian gas holding company did not conduct normal business, but pursued political goals. Alleged debts for gas had been reported earlier, but Gazprom resorted to restrictions on gas supplies to Moldova last fall for the first time in many years, and it had not blackmailed Moldova with gas supply restrictions before. The head of the Energy Ministry said that the initial cost of the audit of Moldovagaz's alleged debt to Gazprom, conducted by Wikborg Rein Advokatfirma AS and Forensic Risk Alliance & Co, amounted to 850 thousand euros, but in the course of the audit, additional work was done and an additional 300 thousand euros were billed. Thus, the total cost of the audit will amount to 1 million 150 thousand euros and the government will need to find a solution to cover the entire cost of the audit. // 06.09.2023 – InfoMarket
