Vitrenko takes revenge on Koboliev. How a failed minister became Zelenskyi's man in Naftogaz
On April 28, the story of the difficult relationship between Yurii Vitrenko and his former boss, head of the Naftogaz board, Andrii Koboliev, received a deserving sequel. At a regular meeting, the Cabinet of Ministers blew up the information space with the decision to dismiss Koboliev from the post he had held since 2014.
Soon another "bomb" exploded: Vitrenko will take the place as "acting" chairperson. But the story didn't end there: in the evening, Naftogaz issued a statement in which it actually refused to obey the decision from above.
How Vitrenko took revenge on his enemy, how the confrontation between the Cabinet of Ministers and Naftogaz could end, and why this story can be in Volodymyr Zelenskyi's interests, find out in the Rubryka article.
Vitrenko didn't become a minister—one hand washes the other
Yurii Vitrenko is unlikely to ever admit this publicly, but one of the motives for his decision to enter the executive branch was probably a hope to get even with the former boss who actually knocked him out of Naftogaz in the spring of 2020.
His termination was the peak of a long-term conflict with Koboliev, although a few years earlier, both managers had acted as a united front and received compliments for the growth of Naftogaz's profits — the lion's share of the "credit" was in increasing utility tariffs for the population, though.
Bad blood brewed between top managers in 2017-2018 when the war against Gazprom in the Stockholm arbitration was in full swing. As a result, Ukraine still won $3.2 billion in compensation, and both top managers received huge compensation. However, the relationship did not get better. And shortly before his dismissal, Vitrenko filed a lawsuit against Naftogaz, demanding to pay him the remaining $6 million in compensation.
"As for my claim in court, I turned not to the state, not to the Office of the President of Ukraine, but to the company where I and my team are working. This lawsuit reflects my position on the rule of law and the fulfillment of my obligations," Vitrenko said.
The compensation issue was resolved when the former top manager agreed to join the government as acting Minister of Energy at the end of December last year; he received $6 million in compensation from a state loan. In a few years, by the way, the amount may increase significantly, so Vitrenko was definitely right.
The desire to get even with Koboliev manifested itself in mid-February 2021 when the media got a letter from Vitrenko addressed to Prime Minister Denys Shmyhal, where the acting minister pointed out the ineffective work of Koboliev and offered to fire him.
Vitrenko failed in becoming a full-fledged minister, but he still managed to take revenge, and such a scenario likely came as a shock for Koboliev.
"I learned about the 'dismissal' from the news. I cannot comment. I've written no statements," he wrote on his Facebook page.
The confusion of Naftogaz passed in the late afternoon when the company issued a statement in which it called the decision of the Cabinet of Ministers a legal manipulation.
"Releasing the supervisory board for two days to make a decision on dismissing the chairperson of the board is an outrage against the fundamental principles of corporate governance of state-owned enterprises," the statement said.
Why Koboliev was fired
The formal reason for dismissing the chairperson of the board was the losses sustained by Naftogaz last year. According to a government statement, last year the company incurred UAH 19 billion in losses, although its management promised to declare UAH 11 billion in profit.
"According to the results of the general meeting of shareholders, the work of the supervisory board and the management of NJSC Naftogaz of Ukraine in 2020 was recognized as unsatisfactory," the government stressed.
Is it possible to fire Koboliev for lack of profit and loss? It all depends on the terms of his contract.
"The thing is that a five-year contract has been signed with Koboliev, and they clearly spelled out the conditions under which an official can be fired. The corresponding procedure is provided in the company's statutory documents. You can dismiss a manager either for failure to comply with the terms of the contract, or when he writes a letter of resignation from his position. Andrii claims that he didn't write such a statement," energy expert Hennadiy Riabtsev says.
However, there's another opinion: it's no secret that Koboliev supports the idea of raising gas tariffs for the population. This fundamentally contradicts the strategy that Volodymyr Zelenskyi requires to promote; the president needs low tariffs if he wants to be re-elected for a second term. It's obvious that it's much easier to exercise control over Naftogaz through Vitrenko, who's close to the Office, and for whom Zelenskyi personally campaigned in the Verkhovna Rada. So replacing Koboliev with Vitrenko is an unambiguous gain for the President's Office. Besides, control over the cash flows flowing through Naftogaz may be another mercantile interest.
Does Koboliev have a chance to hold down a job?
The Supervisory Board could've dismissed Koboliev, but this didn't happen, since the Cabinet solved the issue radically by firing everyone at once. From a legal point of view, this decision cannot be called indisputable; for sure, we'll face a long trial with an unpredictable outcome.
Another significant factor is the response of Europe and the United States. Fired in one fell swoop, Bruno Lescoeur, Ludo Van der Heyden, and Clare Spottiswoode were the actual emissaries who carried out the control from Ukraine's creditors. Their dismissal could be a direct provocation to the West, but Zelenskyi and his entourage showed they know how to negotiate with allies; the indicative example is the resignation of the NBU head, Yakov Smolii. Then they also talked a lot about a potential conflict with the IMF, but everything worked out; now there are no special complaints about the work of the new head Kyrylo Shevchenko.
However, it'd be naive to assume that Vitrenko is an absolutely independent player. He's especially well-known among large gas traders in the United States who wouldn't mind entering the Ukrainian market. And the connection with Kolomoiskyi, broken during attempts to get votes from the Verkhovna Rada to approve the minister, may well be restored. Whatever one may say, Vitrenko did the oligarch a huge service in the case with UkrTransNafta. The position of the chairperson of Naftogaz may not be as impressive as that of the Minister of Energy, but Kolomoiskyi won't miss his interest, and "friendly" ties can be restored.
The story of the chairperson's post at Naftogaz will definitely not end overnight. It's obvious that the decision of the Cabinet of Ministers creates another risky turbulence zone in a field, extremely important for Ukraine. Can something good come of it? For the Office of the President, it may become a serious fortifying, but will it help to reduce gas prices for the population? There are significant doubts about that.