Is there a place for Ukraine in the European gas market, what position does our GTS take on this issue, why is it better for Europeans to cooperate with Ukrainian GTS than with other gas transmission systems – Kosatka.Media spoke with Olga Bielkova, Director for Interaction with Government Bodies and International Organizations of OGTSU.
- In one of your interviews you said that you feel the effectiveness of your work in the parliament. What has changed now, what motivated you to leave the deputy chair for a position in a state company?
- I think I explained everything so well. Actually, I still can't find the right words to describe my delight at what an important company I have joined.
A person has many dimensions of professional realization, even if he or she has been a national-level politician for a long time, has done a lot of useful things and is very proud of it. For 8 years that I worked in the Verkhovna Rada, I missed the hands-on work, which is closer to real problems. When, during my previous cadence, the gas reform was carried out, I had an understanding that we set the right tone at the level of the law. But there are also bylaws, there are regulatory decisions. There is the behavior of the market participants themselves, who can either abuse or, conversely, regulate their activities in the direction of justice. And it is already happening outside the Rada. And I sincerely wanted to understand whether the laws I wrote in the Verkhovna Rada work in real conditions exactly as it was intended. And after several weeks of work, I see that it works not fully.
The law is, first of all, a philosophical approach to how such an important resource as gas will be sold, how it will be accessed within the country or abroad. This is a very fundamental change and one of the biggest reforms in Ukraine. And it was very important for me at every stage to see how our legislative assumptions work in reality. Because it is not visible from the Rada, whatever one may say. Therefore, I have been considering the possibility of either diplomatic work or work in the executive branch for a long time.
Olga Bielkova came to OGTSU from the Verkhovna Rada to make sure that the philosophy of gas laws works in practice
- Why did you choose OGTSU? You could choose any large state or private company in Ukraine or even abroad.
- OGTSU, literally, is one of the most important enterprises in Ukraine. Both in size and, most importantly, in terms of strategic position. During my previous tenure at the Verkhovna Rada, I actively participated in the work to uphold specifically Ukrainian transit interests. And I understand how Ukraine is dependent on the correct functioning of the GTS in all ways – economics, security, geopolitics. And it is difficult to imagine a greater challenge than being a top manager in such a company. On and off, politicians must take such an academic leave in the real conditions of the economy, go to work for large, iconic enterprises. When a person has a combination of legislative groundwork and knowledge of the real sector, it is very useful.
At the same time, I respect those politicians who devote their entire lives to the political process. For me, they are a certain role model, but the world is large, there are also many opportunities and models of behavior for politicians.
- Was it difficult to start working in a new place after eight years in the parliament?
- I have a privileged position, in a particular way. Firstly, I am well aware of the general problem of the oil and gas sector, and secondly, I know many people in this area. Finally, I know possible ways to solve the existing problems, because in recent years I have studied the experience of other countries, both in the West and in the East to understand how Ukraine and strategic Ukrainian companies can avoid certain mistakes.
But, of course, the format of the work itself is different. And every morning I have to remind myself that I am not a politician, that now I have a different goal – to help the company secure its place in the Ukrainian gas market, to guarantee to society the mission that the company is fulfilling as a natural monopoly. The market expects a powerful and independent GTS Operator to lay the foundations for the proper functioning of the entire sector. In addition, it is important to find new ways to strengthen our position not only as an operator, but throughout Ukraine, both in the gas market in Europe and in other new regional markets that are being created today. And to provide Ukraine with profitability from this asset. It should bring corresponding revenues to the budget, both in the form of taxes and in the form of dividends from this property.
Read also: How to install a gas meter: FAQ
And I am very grateful to the team of top managers, they give me the opportunity to gradually occupy this niche of mine. I would say, it is more about service, auxiliary, because the backbone of this company is still technical staff. But there are regulatory, international, even political dimensions in their actions. And I am happy to see that I can supplement this team with something new and useful. Of course, this is the knowledge of our international partners, the ability to conduct a dialogue with them in one language. And here we are not talking about English, but about the language of international communication, macroeconomic and diplomatic.
I also know very well how the Ukrainian political bureaucratic executive machine functions, and there is a certain trust from the people who work there. We have already held a number of conversations with representatives of both international and Ukrainian authorities, keeping them informed about our progress.
I think that no one today denies the team's ability to service the GTS, a very professional, good team has been formed at the technical level. We are in the process of rethinking the reform of the gas market: how the operator should take its right place there, so that the players do not abuse their position, so that the financial stability of the operator is not questioned, so that we have prospects for the development of the gas transmission system despite the fact that there is a change relations with Russia as the main customer of transmission services. And there are huge prospects for the development of new directions, for example, the European hydrogen strategy, in which Ukraine is already called one of the possible partners.
- You said that you have already communicated with international partners. And how are Ukrainian state-owned companies perceived in high European offices today? Are we partners for them or are we still poor relatives?
- As I said, I am not a politician today, but I am pleased to note that over the past 5-6 years we have managed, with Naftogaz team, with OGTSU team that previously worked there, to build a correct understanding of the European partners on the transit issue. We have proven that Ukraine offers the most efficient, most stable transportation route. That Ukrainians are constructive partners.
Today the company's management is working to strengthen this image in relations with Poland, Romania and Hungary. We are now going through a difficult period with Slovakia, but these difficult bilateral negotiations have one main goal – to occupy a mutually beneficial place for the Ukrainian GTS in the European gas market.
They trust us, Ukrainian gas storage facilities occupy a new niche today. This means that the GTS will work, and the state will receive income for owning its own assets. It is also a security issue. The presence of such a strategic resource on our territory is a huge geopolitical lever for Ukraine. This protects us from neglect of our interests, gives strength in negotiations.
Ukrainian GTS is the most reliable and profitable gas transmission system for the European Union, Bielkova believes
I personally see my work in raising our image. We are the solution to many European problems.
Now, if you look at the gas pipelines that are being built bypassing Ukraine, Nord Stream 2 and Turkish Stream, they are technologically much weaker than the Ukrainian GTS, where some lines have three or even four parallel pipes. And this ensures that if some unpleasant situation occurs on one, then there are additional options that will protect suppliers from interruption. Our OGTSU is a powerful company that guarantees the stability of gas supply not only for the population of Ukraine, but for the whole Europe. And we can be proud of it no less than Switzerland for its famous watches.
- Let's go back to relationship with our neighbors. How do you plan to solve the problem with the Slovak operator? And won't we have problems with other countries on the same issue?
- Unfortunately, there is a certain asymmetry of rights and obligations, when members of the European Union may not formally fulfill their own rules in relation to countries that are not members of the European community. We see it as our task to prove to the Slovak partners of economic expediency for both sides. The more trading there is at the border, the more work the GTS operators of the two countries have.
Unfortunately, our proposals were not accepted, as far as we know for today, but I still hope that we will come to an agreement. Because this is a matter of national security. We are preparing for the heating season, and this is one of the main threads that supplies Ukraine with gas. We cannot risk such an important object. And all the reproaches that the repair of the same gas pipeline from Budince gas measuring unit is not necessary now are wrong. If the chief engineer and his group of specialists who have ensured the safe operation of the Ukrainian GTS for many years believe that repairs are needed, then sorry, we thank you for the consultation, but we will act in accordance with the current Ukrainian legislation and technical regulations. But we also faced another problem, preparing for this repair – there were floods in the west of Ukraine. Part of this route proved to be unreachable. Therefore, we devoted some time to analyzing the situation and diagnosing the infrastructure, and when we collected complete data, we found an opportunity to optimize the timing of this repair.
- Did you fail to agree on rebooking?
- Yes. However, we are supported by both our executive bodies and the regulator. As far as I know, Ukrainian diplomats are now also involved in this. Every day we inform the European Commission and our colleagues in Europe about what is happening on our side.
- In your opinion, why is Slovakia behaving this way?
- As a professional, I think that no one owes us anything. And we, as a country, a company, a team, must conquer everything for ourselves. To prove to our colleagues in Slovakia that the strategic understanding and the new European rules described in the codes also work in their favor. Everything else is speculation. And that's what I would like to focus on.
- What, in your opinion, awaits the Russian bypass gas pipelines in the future and what direction does OGTSU plan to adhere to in this matter? Have you already made a roadmap?
- All gas pipelines that today supply Russian gas to Europe bypassing the existing super-powerful Ukrainian Stream, in my deep conviction, do not meet the interests of the whole Europe as the European Union. Perhaps there are significant economic advantages for one or two countries. But Europe itself in all its strategic documents noted that diversification of sources is needed, not routes.
Today the whole world understands that natural gas is a transitional fuel for a certain period. Over time, its consumption will gradually decrease. And therefore, new infrastructure projects that run from the same source of natural gas are not economic, but political. And it is very important for us that all European gas contracts are without political attachments.
- Is it possible?
- Within the framework of European legislation, if it functions as intended, this is exactly how it has to work. Russia does not have direct special agreements with most countries. Gas is traded on exchanges, gas is traded on a mobile basis. It is very important to keep this.
It goes without saying that Nord and Turkish Streams pose a threat to our interests. And we will prove that our infrastructure is functioning, it is reliable, it has been in operation for a very long time without interruption. Everyone has already become convinced that we are not taking anything from either Europe or Russia. We only create added value. And this is why we will fight for our place under the gas sun in Europe.
- Are you planning to conduct direct negotiations with Denmark and Germany on the construction of Nord Stream 2?
- Now the main political and strategic game is being played between the largest countries of Europe and the United States. I am pleased to note that our transatlantic colleagues value the Ukrainian GTS Operator. We plan to strengthen our dialogue with them, to convey all the details of the situation so that they understand that we are protecting not only our own interests, but also the security of all Europe.
- Mrs. Bielkova, the direction you are heading includes work with government agencies. Tell us in more detail, what is the situation in this matter now, what the company managed to do in six months of work and what steps are planned for the future?
- Now the Operator faces several challenges on a national scale. Firstly, there is the problem of imbalances and non-payments. Market players use the regulatory gap to take advantage of certain privileges towards the operator. We work with regulators to ensure that these distortions are eliminated.
Cooperation with state authorities and the Verkhovna Rada is strategically important today.
The Economic Development Committee supported the draft law No.3176. Its adoption will allow the operator to buy gas for its needs not only at Prozorro, but also at the exchange. This will be another important step towards a full-fledged market.
Recently, a project was registered aimed at solving the problem of non-payment of regional gas companies and some problematic issues of the gas market due to the cancellation of PSO. Here we also hope for a dialogue with politicians, for their understanding that if there are any problematic points in the legislation that lead to losses for the operator, then this is not only the operator's problem, it is the problem of the entire state. As a former politician, I can say that it is the most important issue of all possible energy problems today. If we solve all the problems with the gas market, then a lot of other problems will disappear.