On January 20, the experts of the Reanimation Package of Reforms met Andriy Koboliev, CEO of NJSC “Naftogaz Ukrainy.” The participants of the meeting discussed a number of important issues concerning the reform of the oil and gas industry. In particular, the CEO of NJSC “Naftogaz Ukrainy” presented his concept of reforms in this industry. A. Kobolievbelieves that diversification of gas supply sources, immediate increase of prices to match the market rates, implementation of energy-saving technologies, and eradication of corruption in NJSC “Naftogaz Ukrainy” are necessary for the reform to be successful.

The experts of theReanimation Package of Reforms shared their opinions on this approach, making, in particular, the following statements:

• Energy efficiency should be of top priority;
• An effective mechanism of providing targeted government subsidies to the disadvantaged gas consumers should be developed before the prices on natural gas are raised;
• The prices on gas should be raised provided the gas consumption is fully recorded;
• The pricing policy should be approved by the National Commission of the State Public Utilities Regulation, as the increase of prices on gas will lead to the rise of electricity rates;
• NJSC “NaftogazUkrainy” should become a transparent company and publish its financial and investment estimates and reports.

It was agreed that within one week the representatives of the NJSC “Naftogaz Ukrainy” will provide the calculations of the number of gas consumers and the rates of subsidies necessary to increase the gas prices to match the market rates. Andriy Koboliev also supported the suggestion that consumption records should be of top priority and should precede the increase of gas rates. Moreover, the representatives of the NJSC “Naftogaz Ukrainy” agreed to publish the financial estimates, but having stressedthat investment plans, reports, and gas price back-up calculations constitute a commercial secret.

The representativesof theReanimation Package of Reforms and the NJSC “NaftogazUkrainy” reached an agreement regarding a number of the issues discussed and expressed their intention to cooperate further to implement the reforms in the oil and gas industry.