Wed. May 18th, 2022

Yuriy Vitrenko: Escrow accounts could mean Russia only receives money for oil and gas supplied to Europe once it withdraws its troops from Ukraine

Sanctions of the Western countries imposed on Russia in the energy sector were too tardy and insufficient to stop the aggressor, commpented Naftogaz CEO Yuriy Vitrenko during a briefing at the Lviv Media Center.

As the head of Naftogaz mentioned, the Company has long sought to convince European partners to wean themselves off Russian oil and gas. “Unfortunately, Europe is starting to take such actions too late. After all, now the criminal wrongdoings of Russian troops pose a threat not only to domestic supplies in Ukraine, but also to transit to EU countries,” Vitrenko stressed.

He also noted that the sanctions already imposed by the West are not effective enough. “A full embargo on oil and gas supplies from Russia is needed. So-called escrow accounts may be introduced as a temporary tool, a mechanism so Russia cannot immediately receive money from oil and gas exports. All the money will be frozen in special accounts and Russians may only receive payment if their troops are withdrawn from Ukraine. There is a long history of applying this mechanism to countries such as Russia. ”

Vitrenko praised the actions of private Western companies boycotting the Russian oil and gas sector and refusing to work with Russia. However, large service companies are still operating there, which significantly helps the aggressor country to enhance production: “It is crucial that private companies have decided to leave the Russian market:  it is a clear signal that Putin is considered a criminal by international private companies and they are leaving a country that is rapidly becoming a Nazi state. Nevertheless, further action is needed. As a matter of fact, there are international companies still operating in Russia.  For example, the Big Four, as well as service companies such as Halliburton and Schlumberger continue to work in Russia. Russia’s oil and gas sector will not be able to develop without those companies. If they quit Russia, Putin’s economy will encounter significant losses. That is why we appeal to them to exit from Russia without undue delay,” Vitrenko stated.

According to the Naftogaz CEO, part of the world’s humanitarian aid to Ukraine should go to the restoration of energy and communal infrastructure, because a humanitarian catastrophe is inevitable if people have no water, gas, electricity and heating in their homes. The head of Naftogaz has also mentioned that the negotiations on this matter with international financial organisations are underway.

Vitrenko expressed gratitude to foreign investors who, despite the war, continue to work in Ukraine and join in forming its gas balance. He noted that now the executive branch and parliament have adopted a pivotal package of economic measures, which includes a significant cut in the number and size of taxes and reductions in bureaucracy which should greatly simplify the work of investors in Ukraine.

Source – Naftogaz Ukraine