The Russian gas monopoly Gazprom, contrary to published reports concerning the sum decided upon by two arbitrations with Ukrainian Naftogaz in the amount of $2.56 billion, put aside in its accounts a reserve for the full amount of the fine on the transit contract with Ukrainian side.
This was reported by Interfax news agency, citing the company’s statements. The document stated that the balance for fines and penalties for violation of the terms of contracts is recognized as 272.943 billion rubles, or $4.74 billion (at the exchange rate at the end of the year). This amount almost completely corresponds to the decision of the arbitrators.
“Thus, the Stockholm Arbitration’s decision strongly influenced Gazprom’s reporting for 2017 according to Russian standards, leading to a reduction in net profit to a symbolic 100 billion rubles. In 2016, the parent company’s profit was 411 billion rubles. A record profit of 880 billion rubles was reached in 2011,” the report stated.
Last week, Andrey Kruglov, Gazprom’s Deputy Chairman of the Board, announced that the concern will reflect in its accounting records for 2017 a reserve of $2.6 billion as a payment to Naftogaz according to the decision of the Stockholm Arbitration.
On February 28, a long-standing dispute between Naftogaz and Gazprom was resolved in Stockholm arbitration, which ruled that the Russian company must pay Naftogaz $4.63 billion for not supplying the agreed-upon amount of gas. As a result of two arbitration disputes between the companies for the supply and transit of gas, Gazprom must pay Naftogaz $2.56 billion.