"We are ready to work directly. There are no problems, but the debt from previous years must be settled," Vladimir Putin told reporters after a meeting in Minsk with his Ukrainian counterpart, Yulia Tymoshenko.
Putin did not specify the size of the outstanding debt. Ukraine's premier said in late April that Kiev had paid off all its debts to Russia for its gas imports.
It was earlier reported that Ukraine's debt was estimated at around $600 million. In late February, Ukraine paid over $1 billion to Russian energy giant Gazprom to clear its debt for 2007 supplies.
Tymoshenko had repeatedly criticized the convoluted scheme of Russian natural gas supplies to Ukraine, saying it was corrupt and non-transparent. Until recently, the scheme involved monopoly exporter RosUkrEnergo, 50% owned by Russian energy giant Gazprom, and UkrGazEnergo, owned by Ukrainian oil and gas company Naftogaz and Gazprom.
The countries agreed in March to simplify the system by getting rid of trader UkrGazEnergo, but Russia insisted that RosUkrEnergo continue to be involved in the gas supply chain.
Naftogaz and Gazprom signed a contract in March setting the price for Central Asian gas supplies to Ukraine for 2008 at $179.5 per 1,000 cu m for volumes of 49.8 billion cu m.
The price of natural gas Russia sells to Ukraine, and the transit cost levied by Ukraine on Russian gas pumped to the European Union, have proved a major source of contention since Russian energy giant Gazprom began hiking prices to the country in 2005 after years of subsidized supplies.
Ukraine, which transits about 80% of Russia's Europe-bound gas, threatened to start tapping fuel after Russia halved shipments to the country amid a dispute over Kiev's gas debt and supply scheme earlier this year.
