Ukrnafta may lose right to manage Tatneft's Ukrainian assets

The Ukrainian Asset Recovery and Management Agency or ARMA is raising before the government the issue of terminating contracts with Ukrnafta to manage the network of Glusco filling stations and the assets of Tatneft , Ukrainian media reported, quoting a statement on the ARMA website, according to Interfax.

ARMA said the main reason for the decision was a delay in signing the transfer deeds for the assets of Glusco filling stations, which is why the state budget of Ukraine is missing out on revenue from the filling station network.

The agency also considers that Ukrnafta has taken too long to submit paperwork to the Antimonopoly Committee of Ukraine to obtain the necessary permits. The AMCU can take up to six months to review the documents.

"I must say that the state-owned enterprise [Ukrnafta], whose goal was not only to preserve economic value but also to replenish the country's budget [...], has not lived up to reasonable expectations. As a result, the purpose of the orders of the Cabinet of Ministers [on the transfer of assets to management of Ukrnafta] has not been met, and there is no effective management, although the seized filling stations are functioning," the statement quotes ARMA head Elena Duma as saying.

If the corresponding government decision is reached, ARMA will initiate the appointment of a new manager for the Glusco network, "who will ensure the necessary balance of public and private interests and organize predictable, transparent and profitable activities of the seized filling stations," the statement says.

Reports have said the Ukrainian government in August 2023 transferred seized assets of Tatneft to Ukrnafta. Alexei Goncharenko, a member of parliament, said the assets in question were Poltava-Capital LLC, Kharkov-Capital LLC, and Tatneft-AZS-Ukraine LLC. "They own filling stations and other real estate and movable property," he said.

Goncharenko said an explanatory note to the government order stated that at first, the plan was to transfer the assets of Tatneft to Naftogaz, but then it was decided to put them under the management of Ukrnafta.

The government in May 2022 approved an ARMA proposal to transfer the seized Glusco assets linked with Ukrainian businessman and politician Viktor Medvedchuk to Naftogaz. The agreement with Naftogaz was subsequently, terminated, and the government in September 2023, at the agency's proposal, decided to transfer the seized assets of Glusco to the management of Ukrnafta.

Also in September, ARMA and Ukrnafta signed an agreement on the management of Glusco involving the transfer of 85% of net profit to the state, with Ukrnafta receiving 15% for management.

Ukrnafta is Ukraine's biggest oil producer. It has a national network of 537 filling stations, of which 456 are operating.

The biggest shareholder is Naftogaz with 50% plus one share.