Press Release / March 11, 2010

Global Witness concerned at choice of new Ukraine energy minister

Global Witness, the transparency watchdog, is concerned that Yuri Boyko, a controversial figure from the murky past of Ukraine's gas industry, has been put back in effective charge of a key gas supply route from Russia to the European Union.                   

According to media reports on Thursday, the parliament under Ukraine's new President, Viktor Yanukovych, has appointed Boyko to be the country's energy minister, a position he has held before.

Global Witness has been reporting on the gas sector in Ukraine since our April 2006 report It's a Gas: Funny Business in the Turkmen-Ukraine Gas Trade. The report highlighted how little-known private companies have played a central role in the gas trade between Europe and Ukraine, which is a key supply hub for gas from Russia and Central Asia.

The report showed that Boyko, while heading the state gas company Naftohaz Ukrainy in 2004, also sat on a key management committee of RosUkrEnergo (RUE), a private gas company whose position in the gas trade was controversial because neither the Ukrainian nor Russian governments ever fully explained why RUE was needed.

Half of RUE was owned by Russia's Gazprom and most of the rest was owned by Dmytro Firtash, a Ukrainian businessman whose role in the company was not revealed to the public until after Global Witness named him in our 2006 report. Boyko was appointed to his position at RUE by its private shareholders, not the Ukrainian government.

RUE was later at the heart of major gas disputes between Russia and Ukraine in 2006 and 2009 which led to supply cuts to some European countries. "Boyko's reappointment is not good news for anyone hoping for more transparency in the Ukrainian gas sector, which includes the European Union," said Tom Mayne of Global Witness.

"Yanukovych's election as President had already raised concerns that reform in the Ukrainian gas sector would go backwards. Now with Boyko in charge, Ukraine will have to work twice as hard to prove itself an open and reliable energy partner to the European Union. The entire gas sector must be opened up to public scrutiny and independent audits." said Mayne.

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Contact: Amy Barry on +44 (0)7980 664309, +44 (0)207 5616358 or Tom Mayne on +44(0)7939 460357