Energy Minister Victor Parlicov today publicly presented the findings of the audit of Moldovagaz's alleged debt to Gazprom (the controlling shareholder in Moldovagaz), carried out by two internationally renowned companies, Wikborg Rein and Forensic Risk Alliance, from Norway and the UK, selected for their impeccable reputation. The report was also published in full on the Ministry of Energy's website and forwarded to MoldovaGaz for consideration by the Board of Observers and the majority shareholder, Gazprom, together with the Government's proposals to address this alleged debt.

The auditors found that Gazprom was claiming a debt of US$ 756 million (as of 31.10.2021), including current liabilities, of which Gazprom was claiming US$ 709 million as of 31.03.2022. Recognition of this alleged debt by Moldovagaz would mean that each family in our country that is connected to natural gas owes about 1000 US dollars.

According to the audit, much of this alleged debt has not been confirmed or at least cannot be enforced. Thus, the alleged debt of about 276 million US dollars has no supporting documents. This alleged debt would have been incurred between 1991 and 2002. Although the auditors repeatedly requested documentary evidence, Gazprom did not reply, even though according to good international practice it is in the creditor's interest to document the existence of the debt.

However, documents found in relation to this alleged amount would indicate that almost 50% of its value represents penalties for non-payment, part of which was formed as a result of the application of interest rates that were exaggeratedly high in the market context, about 0.35% per day in US dollars.

Another alleged debt, in the amount of about 400 million US dollars, is overdue under both Moldovan and Russian legislation, because arbitration decisions on these alleged amounts were rendered in the period 2008-2020 and cannot be enforced after a period of 3 years.

Moreover, an amount of 135 million US dollars was spent by Moldovagaz without being approved by ANRE. This amount includes:

-32 million US dollars for the construction of the new headquarters on Pushkin Street;

USD -46 million for gas losses in the network;

-23 million US dollars as unapproved investments.

For its part, Chisinau can make a number of financial claims against Gazprom, which has not properly paid some 160 million US dollars for gas transit through Moldova since 2007. Although Moldovatransgaz (owned by Moldovagaz) was at the time the only licensed system operator in Moldova, Gazprom paid only half of the transit fee to Moldovagaz, the other half to Tiraspoltransgaz, a company set up by the Tiraspol administration. This division of the fee contradicts the transit contract and international practice.

At the same time, the government is currently estimating the damage caused by the non-delivery of contracted and requested volumes of natural gas in the fall-winter of 2022-2023.

In addition, the international auditors confirmed information that had been reported previously but had not attracted the attention of the law enforcement bodies. Even since the establishment of the Moldovan-Russian joint venture, a number of actions have been committed which raise questions about their legality. For example, there is the substantial undervaluation of natural gas transportation networks, which were transferred by the state in the 1990s to Gazsnabtranzit, the predecessor of Moldovagaz, on account of an alleged debt of 50 million US dollars. The networks were transferred at the balance sheet price and not the market price, in the face of galloping inflation in the 90s. Moreover, this amount would have been used to pay off a debt on the left bank instead of the alleged debt on the right bank of the Dniester.

Thus, the Government of the Republic of Moldova, as a shareholder, proposes that Moldovagaz should pay 153 573 000 lei (which at the current exchange rate is about 8.6 million US dollars) to Gazprom the alleged debt, and Gazprom should write off the rest of the alleged debt.