Energy Minister German Galushchenko may soon lose his post. The United States insists on his dismissal. The minister’s actions aroused dissatisfaction with Western partners because of the approaches to managing state-owned energy enterprises, primarily OGTSU and Ukrenergo, writes Ukrrudprom.
Back on September 13, 2022, U.S. Ambassador to Ukraine Bridget Brink posted a tweet on her Twitter about a meeting with Energy Minister Herman Galushchenko. In it, she expressed concern about the observance of the principles of corporate governance in Ukrenergo and OGTSU. Then Minister Galushchenko tried to dismiss the chairman of the ODTSU Sergei Makogon and appoint his own leader.
Despite the ambassador’s statement, already on September 19, JSC “Main Gas Pipelines of Ukraine” dismissed Sergey Makogon from the post of head of LLC “GTS Operator of Ukraine”.
At the same time, the European Union, the Secretariat of the Energy Community and the World Bank supported Makogon’s proposed corporate governance reform of the OGTSU. It provided for the creation of a new supervisory board in the OGTSU itself, the election of a new board of the company by a new supervisory board, and the elimination of MSU as an extra management link.
The gas transportation system of Ukraine in 2019 was withdrawn from Naftogaz by creating an OGTSU operator and selling it to MGU. This created a two-tier governance structure – the GTS operator is owned by Moscow State University, which has a supervisory board, but the cash flows are managed by the GTS Operator.
Galushchenko is also trying to fire Volodymyr Kudrytsky, the head of Ukrenergo, the operator of the main electric grids.
As reported Monopolistthe last attempt was in September 2022, when the company received tens of millions of dollars from the sale of the crossing to export electricity to the EU – from June 30 to October 9, 2022, the total cost of accessing interstate power grids was more than UAH 4.9 billion.
In October, after the first rocket attack by the Russian Federation on the energy infrastructure of Ukraine, the export of electricity was stopped. At the same time, Western partners have begun to provide Ukraine with energy equipment and reconstruction funding, primarily for Ukrenergo facilities. After the operator began to concentrate resources on himself for recovery, the idea to change the management of Ukrenergo to a more loyal one became again relevant for Minister Galushchenko.
US insists on dismissal of German Galushchenko
Another reason for Galushchenko’s dismissal may be Energoatom’s purchases of equipment and consumables at inflated prices. The president of the Ukrainian nuclear power plant operator is the minister’s man, Petr Kotin.
According to Our Money, which monitors government procurement, during Russian attacks on Ukraine’s energy infrastructure, Energoatom held a series of tenders, in which purchases were made at significantly inflated prices.
Monopolist also adds to the arguments for the dismissal of Galushchenko:
- the creation, on the initiative of the Deputy Chairman of the OP R. Shurma and Galushchenko, of an exporter of electricity – the state trader ECU, which at one time concentrated 50% of the volume of electricity. The company received UAH 0.5 billion of assistance from Energoatom and a 90-day deferral of payment for electricity.
- the failure of the coal accumulation program in the warehouses of the state generating company Centrenergo in sufficient quantities. Therefore, the company switched to gas consumption and accumulated a debt of almost UAH 3 billion to Naftogaz. As a result, the NAC refused to supply gas to the company and it took it unauthorized from the pipe, as a result of which the state-owned GTS Operator suffered damage.
At the same time, Galushchenko himself adheres to the Ukrainian tradition and, of course, blames Russia for his possible resignation:
Energy minister blames Russia for his resignation
Energy Minister Herman Galushchenko links information in the media about a possible resignation to Russian influence, in particular, due to the intensification of Ukraine’s cooperation in nuclear energy with the American company Westinghouse and denies problems in relations with Western partners.
“This is not the first time that we have taken certain steps with our Western partners, primarily from the United States, and after that there are rumors about my resignation or something like that.“, – Galushchenko said on the air of the national telethon United News.
“Last Friday, we made progress, decided that we would forever end cooperation with Russian technologies in the Ukrainian nuclear industry and begin work on technical documentation for the construction of two nuclear power units using Westinghouse technology, and on the same day they began to “fire me“, the minister noted.
According to him, interest in such information stuffing should be sought in Russia.
At the same time, he added that he had just met with the Prime Minister of Ukraine Denys Shmygal with the energy ministers of Europe and the United States, in which the European Commissioner for Energy Kadri Simson also took part. During this meeting, issues of assistance with the supply of energy equipment to Ukraine were discussed.
According to the minister, such a meeting is another proof that there are no grounds to talk about any problems with Western partners in establishing close cooperation with the ministry. At the same time, in his opinion, “there are certain forces dispersing such rumors.”