The Cabinet ordered the national joint-stock company Neftegaz Ukrainy to sign a contract with the Gazprom, Russia's leading gas exporter, for mutual settlements. The contract will oblige the Gazprom to make an advance payment of $1.25 billion to the Neftegaz for Russian gas piping via Ukraine, next year into 2009. The transits will comply with a corporate contract of June 21, 2002, on the terms and amounts of Russian gas transits for 2003-2013.
To implement the contract, the Cabinet called the National Bank of Ukraine to cancel its demand to the Neftegaz, on which the company transfers into national money a half of its foreign currency revenues coming from the Gazprom.
The Neftegaz will be allowed to pay its profit taxes in installments within the five years of its dealings with the Gazprom.
The Neftegaz Ukrainy owes to the Gazprom $1.48 billion for 1997-2000. On a previous understanding, it was to pay the debt by issuing bonds with ten-year circulation, to be repaid within 2003-2013. The Gazprom, however, refused to accept the securities with the huge taxes they involved.
