Neftegaz: Gazprom's $1 buys bag of Kyrgyz woes

Russian energy behemoth Gazprom has taken over Kyrgyz National Gas Distribution Company - or Kyrgyzgaz - for a mere US$1 based on the agreement signed between the two sides at the end of July this year. The cash-strapped Kyrgyz government saw it fit to sell off the heavily indebted Kyrgyzgaz rather than continue to throw money at a company that was effectively bankrupt. 

Kyrgyzgaz for years struggled to pay its bills for gas supplied from neighboring Kazakhstan and Uzbekistan, often having to ask the government to grant emergency bailouts. The reason for being permanently insolvent was Kyrgyzgaz's difficulty in collecting payment for the delivered gas from Kyrgyz customers, especially state-owned enterprises. 

Fearful of popular anger, especially in harsh winter seasons, Kyrgyz government would grumble but would still lend the company every time gas suppliers threatened to cut supplies due to outstanding debts. Sometimes it would take several millions of dollars, but often several hundred thousand US dollars would suffice to settle the accumulated debts to the suppliers and keep the company running.   MORE