RosUkrEnergo background, and thoughts on its future – Part 1, creation and key figures

RosUkrEnergo logo - From Given recent statements from Russian and Ukrainian officials on the possibility of removing Swiss-registered gas trader RosUkrEnergo as middleman from the Central Asian-Russian-Ukrainian gas scheme, I thought it would be useful to recap the known history surrounding this mysterious firm. I had originally planned on including this information in one post, but will instead split it into several to aid in the breakdown.

Much of this information relies on the in-depth report put together by Global Witness on corruption within Turkmenistan-Russia-Ukraine gas trade.

Creation of the firm

RosUkrEnergo (RUE) was created in July of 2004, four days before a summit in Yalta between Russian President Putin, Ukrainian then-President Kuchma, and businessmen from both countries with the aim of updating the gas trading scheme. As a result of the meeting, RUE was designated as the official replacement for the in-place gas intermediary, Eural-Trans-Gas. While many of the same figures from this troubled firm remained involved in the new middleman, the main difference was the direct involvement of Gazprom — the Russian gas giant owns a 50% stake in RUE through the Gazprombank-owned firm ArosGas Holding AG. The remaining 50% stake is owned by CentraGas Holding AG, which is controlled by Raiffeisen Investment on behalf of individuals who did not wish to be named.

When asked about whom its firm represents, a Raiffeisen official would only say,

“A consortium of Ukrainian businessmen and companies, very knowledgeable in the gas trading business, very well-connected in the Ukraine…[who] know about the local background [and] local politics.”

There was apparently some hope that after the problems of dealing with the privately-owned Eural-Trans-Gas, the new subsidiary could function better with more direct state involvement — that is, split ownership between Russia’s Gazprom and Ukraine’s Naftogaz. However, this was not the case, as the Ukrainian side of the firm was once again placed into the hands of private individuals.

When asked why this was the case, Putin asserted that it was a Ukrainian decision to include Centragas rather than Naftogaz:

“Ask Viktor Yushchenko [why Naftogaz is not directly involved]. Gazprom has a 50% stake and the Ukrainian side has 50%. I said to Viktor Yushchenko, ‘we would welcome it if your 50% stake is held directly by Naftohaz Ukrainy. But this is not our decision. It was the Ukrainian side’s decision. Who the names are behind the 50% stake held by Raiffeisen Bank, I don’t know any more than you do and Gazprom does not know either, believe me…It was they [the Ukrainian side] who proposed that RosUkrEnergo supply gas to Ukraine instead of Gazprom. We agreed.”

Putin made these comments in January of 2006, following the disruptive gas dispute in which RUE took a major role within the settlement. He seems, however, a bit misleading in asserting that it was Yushchenko himself who was dictating the terms of the makeup of RUE — after all, the decision on the creation of the firm was made at a meeting between Putin and Kuchma, Yushchenko’s predecessor. Yushchenko arrived on the scene after the structure had already been put into place, and lacked the options to easily adjust the lines of ownership.

Key Personnel

However, that isn’t to say that Naftogaz was not in some way represented in the RUE. According to the minutes of the inaugural company meeting in July 2004, Yurii Boyko and Igor Voronin — Naftogaz’s chairman and deputy chairman — were nominated by Centragas to be on RUE’s coordinating committee. Voronin left the coordinating committee in June 2005, coinciding with announcement by Ukrainian officials of a criminal investigation into RUE. Boyko apparently left the committee at around the same time. Boyko and Voronin were both sacked from Naftogaz’s leadership following Yushchenko’s ascent to presidency in 2005, but both later returned to prominent positions within the industry. Voronin was rehired as deputy chairman of Naftogaz around September of 2005 following the dismissal of Yulia Tymoshenko from Ukraine’s premiership, and is still working there. Boyko ascended to Minister of Fuel and Energy once Yanukovich’s government entered office, and currently still serves in that position (at least until the new Tymoshenko-Our Ukraine government is installed).

The identity of the Ukrainian figures behind Raiffaisen’s side of RUE was eventually established (under shady proceedings) following threats of investigation by the US Justice Department. Dmitry Firtash, a reclusive and camera-shy billionaire, owns 90% of Centragas (giving him 45% of RUE) while the remaining 10% is held by Ivan Fursin.

Firtash is listed in Wprost’s recent listing of Eastern Europe’s richest people as the 5th richest Ukrainian, with $3.4 billion in assets primarily in “petroleum, [and] gas.” Firtash also controls a series of chemical and titanium factories, a Kyiv basketball team, and owned the modestly-sized television stations K1 and K2 before apparently recently selling them.

Fursin, not appearing on the list, is a more minor figure in the Ukrainian business world. He owns a bank and movie studio in Odessa and some other local assets. He is also involved in various other Firtash-connected investments, like the Cyprus based companies Highrock Holdings and Arcadea Investment Fund Ltd.

Taking a look beyond ownership and into the RosUkrEnergo’s management structure, we can notice some trends:

  • The two-person Board of Directors consists of a Swiss economist, Lars Haussman, and a lawyer, Hans Baumgartner. Baumgartner was recently outed by Stern magazine as being involved in Gazprom’s complicated international monetary schemes (principally involving Switzerland and Cyprus, it seems).
  • The Executive Directors are two Russians — one a St. Petersburg native with experience in “various office positions in security services” before joining Gazprom where he serves on the board as well as head of the company’s legal division. The other is a hold over from Eural-Trans-Gas management.

RUE’s Coordination Committee is split into two halves, one representing Gazprom and the other Centragas.


  • Valery Golubev - From Valery Golubev
    Golubev replaced Alexander Ryazanov, the former head of Gazprom Neft who clashed with Gazprom leadership over the role of its oil division and left the company (under unclear circumstances) early this year. Golubev is also a St. Petersburg native (serving in the Mayor’s office at the same time as Putin) with experience in the security services (KGB), and had previously overseen the procurement and investment division of Gazprom. Under his watch, this division’s expenses ballooned by about 80% as it began purchasing materials from intermediaries rather than directly from manufacturers. Golubev is also a deputy chairman of Gazprom’s powerful Management Committee and coordinates sales to former Soviet countries (but not RUE specifically).
  • Alexander Medvedev - From Alexander Medvedev
    Medvedev (no relation to Gazprom chairman and Russian first deputy PM Dmitry Medvedev) is in charge of Gazprom’s export division, Gazpromexport and, like Golubev, is also a deputy chairman of Gazprom’s management committee. He is one of the most powerful figures within Gazprom’s management, mainly due to his control over the lucrative export business. When RUE replaced Eural-Trans-Gas as the gas intermediary for Ukraine, Gazpromexport was able to regain control over providing gas to Ukraine. This increased its export totals by over 30 billion cubic meters per year (more than a quarter of its total export volumes), adding considerably to the division’s bottom line.
  • Sergey Khomyakov - From Sergey Khomyakov
    Khomyakov, another deputy chairman of Gazprom’s Management Committee, was also recently appointed as head of Gazprom’s private Security Service. Gazprom apparently employs tens of thousands of private security guards (many former KGB-types), who were just recently given expanded rights on carrying arms to protect company property — at home, or abroad.
  • Stanislav Tsygankov
    Tsygankov is the head of Gazprom’s foreign economic relations department, but is a figure I know nothing about.


  • Dmitry Firtash Dmitry Firtash
    After being “outed” as the major owner of Centragas, Firtash took a visible role on the coordinating committee. Previously, Firtash was behind the registering of Eural-Trans-Gas (whose interesting history will have to wait until a later post) in December 2002. Firtash is director of the Cyprus-registered Highrock Holdings, which cooperated with the predecessor of Eural-Trans-Gas, Itera, in supplying barter goods to Turkmenistan for gas deliveries. He also controls the Estonian fertilizer plant Nitrofert (that proudly claims to account for about 25% of the country’s total natural gas usage), and the Hungarian gas company EMFESZ (which apparently buys gas from RUE for reselling on the Polish and Hungarian markets).
  • David Brown
    Brown, an Englishman involved with Eural-Trans-Gas management along with Robert Shetler-Jones (see below) and Howard Wilson, seems to have originally become involved through shared Moscow property deals with all three men. His connections to Shetler-Jones led to his involvement in Eural-Trans-Gas and then RUE.
  • Robert Shetler-Jones - From Robert Shetler-Jones
    Shetler-Jones entered the Ukrainian business world at the age of 22, when he founded a consulting firm in 1991. He apparently met Firtash through the other partial owner of Centrgaz, Ivan Fursin (see above), and facilitated the cooperation between Firtash, the British-registered JKX Oil and Gas, and Eural-Trans-Gas. He is the managing director of RSJ Erste, which controls various Ukrainian, German and Italian chemical factories. (RSJ Erste is a subsidiary of Firtash’s GDF company, and was in the running in the recent re-privatization of the Krivorozhstal steel works.) In general, Shetler-Jones is seen as Firtash’s “Western” partner. He was removed from the direct management of RUE around June of 2005, following the “transition period” during which he was ostensibly installed to help guide the firm. Since then, however, he has apparently been reinstated and now continues to serve in a leadership position. (He also has been staying involved in Ukraine-Europe energy relations, particularly through his consulting firm Scythian Ltd.)
  • Hanno Schatzmann
    Schatzmann is another Austrian lawyer, specializing in mergers, acquisitions and corporate law. He apparently replaced the German Wolfgang Putschek as the “local” representation of Centragas.

There is some speculation that Firtash himself is acting on behalf of another figure, but this has been vehemently denied by him and Shetler-Jones. The Englishman has also suggested that the company is misconstrued, and is less mysterious than it would seem:

I would argue that Rosukrenergo is not a murky company, in fact it is very open and transparent. It is a Swiss registered company. The owners of the company are known, and Ukraine is benefiting today from some of the cheaper gas in Europe as a result of RosUkrenergo’s business.

RUE began under very shady circumstances, and operated for much of its early life outside of the public sphere. With the January 2006 gas deal, the firm was forced into the spotlight — Firtash was finally photographed and admitted to being they key owner, and efforts were made to legitimize the business. RUE now posts some of its financial data (which I will talk about more in another post), as well as its management positions and basic company history.

Firtash has also — with the help of Shetler-Jones — recently consolidated his holdings, admitting ownership of them and incorporating them under the umbrella of Group DF. This move seems to be aimed at boosting the public perception of Firtash and legitimizing the investment efforts being undertaken in his firms, while modernizing a previously much more opaque structure.

RosUkrEnergo has a long way before it becomes transparent, however, and this problem has led to many of the issues that have dogged the intermediary since its inception — a topic for the next post on RUE.


4 responses to “RosUkrEnergo background, and thoughts on its future – Part 1, creation and key figures

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