Yuriy Vitrenko, the head of Ukraine’s state-run energy company Naftogaz, has spent the first six months of this year dealing with a series of crises that no other chief executive on the planet has even had to contemplate.
He’s had to make the decision to abandon the company’s headquarters in Kyiv at the start of the war, with staff burning key documents before leaving. Now back in those offices, Mr. Vitrenko has had to fend off requests from furious employees who want to blow up Naftogaz pipelines, which are used – even now – to transport Russian natural gas via Ukraine to customers in Europe.
With growing energy shortages in Ukraine and around the world, the second half of 2022 isn’t shaping up to be any less pressure-filled for the CEO with one of the most difficult jobs anywhere.
For Mr. Vitrenko, who has personal experience negotiating with Russian President Vladimir Putin, a top priority now is persuading the Canadian government not to compromise sanctions against Russia by returning a turbine that is part of the Nord Stream 1 pipeline, which delivers Russian gas to Germany via a route under the Baltic Sea. The turbine was manufactured by Siemens AG and sent to its Montreal facility for repairs just before Russia launched its invasion of Ukraine.
Russia has blamed the missing piece of equipment for a 40-per-cent reduction in gas flow through Nord Stream 1, which has contributed to rising energy prices across Europe.
Mr. Vitrenko, who went head-to-head with the Russian leader at a 2019 summit over money Moscow owed Kyiv for transporting Russian gas, says all sides know the pipeline can operate at full capacity without the stranded turbine.
“Putin is bluffing a lot. He projects this alpha-male kind of personality, in an obvious attempt to kind of intimidate you or to get basically what he wants from you,” Mr. Vitrenko said in an interview last week at his office in Kyiv, shortly after air-raid sirens screamed through the capital, forcing him and his staff to take refuge in a bomb shelter under the building.
“I understand that it’s a rather fragile situation. But what we are trying to explain to everybody is that it’s not really a matter of Germany getting enough gas, it’s really about not letting Putin blackmail everybody and showing that he’s above the law and showing that, if he wants, he can get the sanctions easily removed.”
A spokesperson for Germany’s Economy Ministry said this week that Berlin and Ottawa remain in “discussions” about the fate of the turbine. In a virtual meeting Monday, Ukrainian Energy Minister Herman Galushchenko warned Minister of Natural Resources Jonathan Wilkinson that returning the turbine would set “a negative precedent” of circumventing the West’s sanctions against Moscow.
The high-stakes diplomatic wrangling is low-pressure stuff compared with some of the dilemmas Mr. Vitrenko has faced this year.
The decision to abandon Naftogaz’s nine-storey office tower in Kyiv was based on his security team’s belief, and the predictions of many Russian and Western analysts, that the capital would be overrun by Russian forces within a matter of days. Leaving meant destroying all the company’s classified documents so they wouldn’t fall into Russian hands.
“It was kind of challenging, diplomatically speaking, if not scary,” Mr. Vitrenko said – deciding which documents needed to be burned, not knowing if Russian troops would arrive before the job was done. The process took more than a day. “Everything was very, very dynamic. It seemed like it was very, very likely that Russian troops will be inside the government quarters very soon.”
Naftogaz wasn’t alone in fleeing Kyiv in the first hours and days of the war. Western embassies, including Canada’s, had already abandoned their premises in Kyiv and torched documents in the terrifying run-up to the invasion.
Now back in his office – with its view of the Presidential Administration Building, still considered a prime Russian target – Mr. Vitrenko said the company was going through a “rethink” of its decision to evacuate, while trying to find backups of the destroyed files, some of which don’t exist. He said he couldn’t disclose whether the decision to burn key documents and destroy backup files had hampered the company’s operations.
It’s all a very long way from the pro-Russian household the 45-year-old Mr. Vitrenko grew up in. In the 1990s and early 2000s his mother, Nataliya Vitrenko, headed the Progressive Socialist Party of Ukraine, a political movement that pushed for closer ties with Moscow. She ran for president twice, never winning more than 11 per cent of the vote. Mr. Vitrenko bucked that family background to work at such Western titans as PricewaterhouseCoopers and Merrill Lynch before joining Naftogaz.
Even more vexing than the decision to leave Kyiv is Naftogaz’s continuing work carrying Russian gas – between 55 and 60 million cubic metres a day – to Europe via its network of pipelines. Russia, just as curiously, continues to make transit payments in euros to the Ukrainian government, so each country is effectively funding the other’s ability to wage war.
Mr. Vitrenko said the decision to continue carrying Russian gas is “always a moral challenge” for Naftogaz. “From the very first days of the war, this topic was discussed at the highest level here in Kyiv, but also in Berlin and in Washington. And there are reasons why we’re still doing that. Some military reasons, but also probably the most important reason is that our international partners – the Germans, in particular, but other Europeans as well – they asked us to continue the transit despite the war.”
Mr. Vitrenko acknowledged that even some of Naftogaz’s own employees don’t accept that logic. Early in the war, he said, multiple employees – as well as members of the country’s military – approached him to ask him why Ukraine didn’t just destroy the pipelines delivering Russian gas to Europe and thus helping fill the Kremlin’s coffers.
“My employees wanted to blow up this pipeline, many times. Many of our employees died because of the war, some of them doing their job. So many of them came to me and say, like, ‘Why don’t we just blow it up?’ ”
Twenty-nine Naftogaz employees have been killed in the war – 11 in Russian attacks on oil and gas infrastructure, 18 serving in the military.
“I had to explain to my own people that, look, despite all our losses, we need our international partners on board, we need to make these decisions based on some cold logic, rather than just based on emotions,” Mr. Vitrenko said.
He said that when Europe stops buying Russian gas, “it will just automatically mean that there’s no transit.”
Even bigger conundrums lie ahead. With much of Ukraine’s energy infrastructure damaged by the war, and a Russian blockade preventing imports via the Black Sea, the country is expected to face severe fuel shortages just as winter sets in. Mr. Vitrenko said Naftogaz is seeking new suppliers abroad to cope with what he called the “huge challenge” of delivering gasoline and diesel to market, including a memorandum of understanding the company signed last month with Quebec-based Symbio Infrastructure.
The deal with Symbio would see the Canadian firm deliver liquefied natural gas and green hydrogen to LNG terminals elsewhere in Europe before being transported to Ukraine via pipelines. The deal, however, is contingent on regulatory approval, and supplies aren’t expected to start arriving until 2027.
While he said he was hopeful the approval would eventually come through, Mr. Vitrenko said he felt Western countries, now focusing on environmental sustainability, had forgotten the importance of geopolitics.
He said the West’s moves to wean itself off coal and nuclear energy – combined with reduced investment in oil and gas infrastructure – had left Europe, in particular, overly reliant on Russian oil and gas. With greener alternatives not yet ready to pick up the slack, it has created a state of affairs that has empowered Mr. Putin’s militarism.
“It’s impossible to achieve environmental sustainability without geopolitical sustainability,” he said. “And being critically dependent on such a rogue regime as Russia is not geopolitically sustainable, because it makes Russia believe that they can invade their neighbours.”
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