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    Ukraine Raises Crimean Claim to $8bn


Naftogaz wants compensation for assets lost in 2014.

by: William Powell

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Ukraine Raises Crimean Claim to $8bn

Ukraine's Naftogaz and six of its subsidiaries have raised their claim against Russia over assets it seized in the March 2014 annexation of Crimea to "around $8bn," including interest, the state company said February 17.

Naftogaz scored a victory in March last year when the Hague Permanent Court of Arbitration (PCA) ruled that Russia had breached a number of bilateral investment treaties (BIT) by expropriating Naftogaz's assets in Crimea, including its upstream production arm Chornomornaftogaz, which at the time of its seizure was producing about 1bn m³/yr. But the court is yet to decide how much Russia needs to provide in compensation to Naftogaz.

The Ukrainian firm said in July its claim was worth $5.2bn and told NGW February 18 that the diffference was explained by the $3bn of interest.

Despite Russia's appearance in the arbitration in January 2017, it refused to actively participate in the proceedings for nearly three years, Naftogaz said. Thereafter, Russia submitted its counter-memorial in December 2019, but did not put forward any alternative measure of damages. Instead, Russia argued that it owes Naftogaz nothing "despite the fact that Russia does not dispute that it unlawfully expropriated Naftogaz's assets." 

According to court documents, Moscow has not appointed any representatives and it does not recognise the jurisdiction of the PCA.

Naftogaz's other subsidiaries involved in the case are Ukrtransgaz, Likvo, another gas production subsidiary  Ukrgazvydobuvannya, Ukrtransnafta and Gaz Ukrainy.