The just simple business disputes but itThe just simple business disputes but it

The Russian–Ukrainian gas conflict started because of the Ukrainian company Naftohaz Ukrayiny, which produces oil and gas and Russian gas supplier company Gazprom over natural gas supplies, prices of gaz, and debts. It turns to be not just simple business disputes but it turns to be a very huge scandal between countries, its involved political leaders from several countries, because some of the European countries are dependent on natural gas which imports from Russia and transported through Ukraine. As for today, Russia provides around 30% of the natural gas consumed in the European Union; approximately 80% of this gas goes through pipelines across Ukrainian soil prior to arriving in the European Union.  European countries purchasing gas from Russia, because its less expensive due to lower transportation costs.  The conflict started back in March 2005 because two companies could not decide about the price of natural gas supplied and the cost of transit. During this conflict, Russia blaimed Ukraine that they were not paying for gas which Gazprom was delivering, but diverting that which was proposed to be exported to the EU from the pipelines. In the beggining Ukrainian government denied the accusation ,but then Naftohaz admitted that gas which was supposed to go  to the EU countries was used for domestic needs. On 1 January 2006, Russia stopped supplying its gas which was passing through Ukrainian territory, but few days later countries made an agreement, and the supply was restored. But in October 2007 new conflict began over Ukrainian gas debts. This  situation led to reduction of gas supplies in March 2008.  After that during several years two companies had very hard relationships. In June 2010, a Stockholm court of arbitration forced an Ukranian company Naftohaz to return 12.1 billion cubic meters of gas to RosUkrEnergo, which is a Swiss-based company (Gazprom controls 50% stake). In April 2014 Gazprom cancelled Ukraine’s natural gas discount which was agreed at the end of 2013 Ukranian-Russian action plan because since 2013 their debt to Gazprom was $1.7 billion. Later in December the price jumped up to $485 per 1,000 cubic meters because the Russian government cancelled an export-duty exemption for Gazprom.  Ukraine transferred $786 million to Gazprom, but, as Gazprom stated on June 16, 2014, Ukrainian debt to the company equalled to $4.5 billion. In the same year in November Gazprom stopped its export of gas to Ukraine. However, as Kiev stated, they decided not to buy gas from Russia anymore because they found several alternative gas suppliers According to Gazprom they stopped deliveries of gas because Ukraine had not paid them for the upcoming delivery. Russia wants to stop supplying its gas to Europe through Ukraine after 2018For a very long time Ukraine has been receiving gas from Russia. In 2015, Ukraine has completely stopped importing gas from Gazprom and became independent on it. As a result of this event, theoretically Ukraine gained possibility to make a choice between multiple number of gas suppliers – for example Cez, Czech Republic natural gas supplier, or French company Engie . Such variety of options means that Ukrainian citizens most likely will pay less for heat and energy. Con:Benefits for Ukrainian clients can be barely seen. Russia has already reduced to a minimum amount of gas transferred through Ukraine to its European clients. In addition, Gazprom has a plan to exclude Ukraine even from this right after 2018 by using alternative gas routes such as Turkish Stream and Nord Stream . Transits although will continue, but in very little amounts – around 15 billion cubic meters in a year, which is five times less than it was before. Moreover, if Gazprom decides to stop transferring gas through the country, it will cost Ukraine around $3 billion every year, as it was projected in the end of 2017. Starting from 2015, Ukraine buys Russian gas from European suppliers. On this graph could be seen that gas price for Ukraine is way higher than the average Gazprom price for European countries. Every month Ukraine looses approximately $35 million because of these actions, which is crucial for the country. Obviously this conflict affected the company. By stopping sending gas through Ukraine Russian gas company ‘Gazprom’ might open new markets and opportunities for themselves. For example, right now they are working with Turkey on Turkish stream . Also right now Russian and German governments are working on Nord Stream 2. It could be a good alternative of how to transfer gas to the EU.   Another alternative for Gazprom could be that they might increase gas supply to the UK. Alexander Medvedev (Deputy Chief Executive Officer of Gazprom) assumed that Britain will increase imported volumes of gas from 8 billion to 12 billion cubic meters annualy by 2025.  CONS:One of the negative things is that now company should find another way of how to trasfer gas to the EU. Right now, Gazprom makes $ 60-$70 billion yearly because of the gas they sell to the EU a year, which is 60% of its total revenue. For now it is very  complicated for ‘Gazprom’ to transfer its gas to the EU and that is why they are loosing a lot of money.  Also from the graph below, we can see some European countries and how they are dependent on Russian gas. Russian Federation might ruin relationships with those countries, because ‘Gazprom’ cannnot give them the amount of gas they actually need.  From the graph below we can see that in 2012 almost all European countries were dependent on Russian gas.