Who Left Moldova Out of Cheap Kazakh Gases?

Sâmbătă, 24.12.2016 05:43   2964
In early summer of 2016 Anatol Stati, head of Ascom Group oil empire, resumed his legal action against former Moldovan president Vladimir Voronin.

Mr Stati claims damages of 1.55 billion dollars from the Communist party leader. Aside from this, the damages which Moldova has borne are larger. 

This is a translation from Romanian. The original story is HERE

Ten years ago Moldova had a unique chance to get rid of its heavy dependence on Russian natural gases. The country had missed the opportunity largely because of the political leadership at that time. 

Moscow’s Blackmail and Chisinau’s Reaction 

December 14, 2005. At a meeting in Moscow with Moldova’s then-First Deputy Premier Zinaida Grecianîi, the head of the Russian gas giant, Mr Alexei Miller let her know that Gazprom had adopted a new price policy for Moldova, literally forcing the small country to accept “average European prices” for Russian natural gases. Seventeen days later Gazprom halted gas delivery to Moldova and decreased delivery to Ukraine for “demonstrating lack of flexibility.”

There was an immediate reaction from Chisinau and Kiev. 

„We have noticed the same scenario as plotted in advance behind those actions of the Russian side – it is about pressure and energy blackmail which undermine the economic development of our nations and destabilize the social situation inside. [...] Increasing the price of gases for moldova from 80 up to 160 US dollars per 1,000 cubic meters is nothing else but removal of revenue from the joint venture [Moldova-Gaz] in favor of one single shareholder. Without doubt this is a conflict of interest and has nothing to do with the market rules,” says a joint declaration which Moldovan President Vladimir Voronin and his Ukrainian counterpart Victor Yushchenko issued on January 3, 2006. The declaration was specifically meant for the European Union. 

The declaration did not really impressed Russia and without any viable alternative Moldova ultimately accepted Moscow’s rules of game. In mid-January 2006 Russian natural gases filled in the pipes again while tempering the financial appetite down to 110 dollars per 1,000 cubic meters. Talks started to negotiate a new contract.

In March 2006, the cabinet led by Mr Vasile Tarlev designated Mrs Zinaida Grecianîi, who was a deputy premier, to handle the negotiation for a new gas contract with the Russians.  This process lasted for the rest of the year and the price of Russian gases meanwhile increased till all 160 dollars, since July. The official parties in negotiations were Gazprom and its daughter company Moldova-Gaz. Mrs Greceanâi as a chief negotiator had an observation role. The fact that negotiations with the Russians lasted so long tells readers that Moldova lived indeed very difficult times. 

Ascom Comes Forward with Alternative Solution

During that time of hardship a domestic company came forward with an alternative solution. Ascom Group proposed the Government to let it bring natural gases from Kazakhstan, a former Soviet republic in Central Asia, for half the price of Russian gases. 

On March 15, 2006, then Industry and Infrastructure Minister Vladimir Antosii and Ascom Group Chairman Anatol Stati signed a protocol of intentions that declared the energy supply diversification and minimizing the political and economic risks for Moldova as a primary goal of such partnership. 

The document envisaged establishment of a joint venture between the Moldovan Government and Ascom Group to import natural gases from Kazakhstan, namely from Tokinneftegaz, a daughter company based in the Central Asian nation. Supply should have started in late June or early July of 2006 – and this is pretty fast. Ascom said it was prepared to supply between 2.6 and 3.0 billion cubic meters of gases within ten to twelve years. This would have been enough to cover the needs of the whole country. 

Ambitious Project: Cheap Gases and New Power Stations 

The price too was attractive: for 2006 it was just 50 dollars per 1,000 cubic meters at the Kazakh-Russian border and 76 dollars at the Ukrainian-Moldovan border. Ascom Group was leaving a window open for negotiations on prices whenever necessary, depending on business conditions in Kazakhstan. 

The volume of gases which Ascom Group intended to ship to Moldova was enough to cover the needs of consumers and to produce electricity at a 450-MW power station which the company planned to build near the city of Balti, in northern Moldova. It also intended to modernize electro-heating stations CET-1 and CET-2 in Chisinau and to increase their capacities by 200 MW and 450 MW respectively. 

Ascom, Ready to Invest Millions into CET-2

Mr Stati’s company had also in mind construction of an underground storehouse for gases in Romania, near Margineni, in Piatra Neamt County, and its connection with the Moldovan gas pipe network. At the first stage Ascom would have pumped four billion cubic meters into the storehouse and keep it there as a strategic reserve, in case of natural disaster or other unforeseeable events. 

Another job in the do-list was the exploration of gas and oil deposits on Moldovan territory.


The Government in turn pledged to persuade the Kazakh authorities to let the company obtain a gas field in the Caspian Sea. The two would-be partners had to set up a taskforce for coordination. 

This was a very ambitious plan and should it have succeeded Moldova – which purchased natural gases from Russia and electricity from Russia-controlled Transnistria – would have gained energy freedom from Moscow. The Moldovan authorities though lacked both vision and will to carry out the plan. 

Negotiations with Gazprom

Everything was serious – the Government immediately started negotiations with Moldova-Gaz, Gazprom and Kazakh authorities. Ascom’s Tolkinneftegaz already signed a draft agreement and tabled it before the partner for signature. The price was 50 dollars at the gas measuring station at the Opornaya artery junction. 

Then Prime Minister Vasile Tarlev convoked a special meeting on June 26, 2006 to review the negotiations with Gazprom and gas transit conditions from Kazakhstan to Moldova. At the end of that month Mr Tarlev traveled to Moscow for a te-a-tet meeting with Gazprom management. The meeting was slated for June 30 but the Moldovan governmental envoys never got to that meeting with Gazprom officials. 

These men took part in the meeting: Gazprom Deputy Chairmen Alexandr Ryazanov (who was also head of the observation board in Moldova-Gaz) and Alexandr Medvedev; Moldova-Gaz Chairman Gennady Abashkin; Ascom Chairman Anatol Stati; F. Uzbekov, deputy chairman of KazRosGaz from Kazakhstan; and lower representatives of those companies. they discussed the intention of Ascom to import 600 cubic meters of natural gases into Moldova in 2006 and another 3.5 billion cubic meters in 2007.

The minutes of that meetings say that 1) Moldova-Gaz was recommended to sign a short-term agreement for gas supply from Gazprom, at 160 dollars / 1,000 cubic meters, so that consumers continue to receive gases; 2) Ascom was told to negotiate with KazRosGaz an agreement for acquisition and transportation of gases from Kazakhstan to Moldova; 3) Gazexport, a Russian company, was expected to deal with the gas transportation from Kazakhstan to Moldova; 4) KazRosGaz was shown to negotiate the supply conditions with Gazexport. 

The outcome of the meeting was not exactly what Ascom had expected. Mr Stati informed Prime Minister Tarlev and Industry Minister Vladimir Antosii that Tolkinneftegaz had already signed an agreement with the Kazakh authorities and that Almaty had agreed to let the firm export 100% of the gas it extracted. 

The businessman also mentioned that the Russian side new about Ascom’s plans and neglected the 1995 CIS agreement on common policies in free transition of natural gases – the Russian “categorically refused to abide by that international document,” he complained. 

„This is a political matter which needs to be addressed at a higher level – between governments. […] As you see our company has done all it was able to in order to have an agreement for direct supply of natural gases to Moldova and we are available in the future to do our best in order to achieve this goal,” the Ascom chairman said in his letter to the premier. 

As Gazprom refused to accept the deal with Ascom, the Moldovan authorities abandoned the project for fears of possible measures from Moscow and because of political interests. 

No Talks with Kazakhstan – No Gases 

Ascom said Moldova needed to stand firm in negotiations with the Russians. By the way Moldova continued the talks with Kazakhstan. Vladimir Antosii who was the industry minister between April 2005 and March 2008 has admitted that Moldova would have been secured with Kazakh gases if the negotiations had continued. 

„I do remember very well and my opinion is that the negotiations with Kazakhstan regarding the supply of natural gases had to continue. Everything was fine when they started and then something happened and things stalled. It wasn’t Kazakh President [Nursultan] Nazarbayev, who was keen to sell gases to Moldova,” Mr Antosii recalls. According to the minister, it was 2008 when the negotiations with Kazakhstan actually stopped. “I’ve been in Kazakhstan three times and twice I met Mr Nazarbayev. He was very strong motivated to let us sell Kazakh gases. But something happened then. A decision was taken at the highest level, by the presidents,” Vladimir Antosii told Mold-Street.com. 

Ex-Premier Vasile Tarlev confirmed – there was an initiative of this kind but he blames Ascom for failure. 

„I remember that businessman Anatol Stati had tabled an initiative to bring naural gases from Kazakhstan. A few impediments appeared later. First, he indeed operated a few probes but those probe would have extracted cheaper gases than the market was offering including Gazprom some time in the future. We were not against and asked guarantees for delivery of that gas at our border. Then we heard it [Ascom] was only able to ship it to the Kazakh-Russian border,” the former prime minister recalls. 

He continued, “We needed gas in Moldova not in Kazakhstan. Later negotiations kicked off with Gazprom regarding the transit of gases. I got involved, I talked to Gazprom officials to persuade them to let the transit and it looked like they agreed, and then they suggested us to discuss the issue with the people who own that gas. I don’t remember exactly what followed, but Kazakh gases never reached Moldova.”

Mr Tarlev assured that he had participated in the talks with Gazprom in a hope to attract more Russian investments and to keep the prices as low as possible.

Nonetheless the Russian gas price increased from 170 dollars as of January 2007 up to more than 200 dollars in summer same year, and 360 dollars in summer of 2008. In just two years the price increased four times. 

Voronin and Nazarbayev Destroy an Investment of One Billion Dollars  

A new turn in the Kazakh gas project happened in 2008. In October that year now former president Vladimir Voronin of Moldova sent a letter to his Kazakh counterpart Nursultan Nazarbayev. Mr Voronin, who was the head of the ruling Communist party, accused Anatol Stati of hiding his revenues, laundering huge money, and non-transparent support for opposition parties among others. 

In 2010, the Ascom chairman sued Mr Voronin in a court of law for defamation. The Communist leader softened his stance by arguing that he only delivered a reference about Mr Stati at the request of the Kazakh president – no defamation was intended, he insisted. 

Communist lawmaker Oleg Reidman who served as Voronin’s aide in 2002-2009, had been actively involved in the correspondence between his boss and the Kazakh leader; he traveled to Kazakhstan for this purpose. Mr Reidman refused to talk to Mold-Street.com on the topic. „It is no longer a matter of my concern. I had provided the necessary explanations o people who needed to hear them,” the lawmaker stated.

Meanwhile Ascom Group managers who asked not to be named told Mold-Street.com that namely Voronin’s letter was crucial in persuading the Kazakh authorities to launch an avalanche of inspections at Mr Stati’s companies in the Central Asian republic. Ascom Group ultimately lost its properties and shut its business in Kazakhstan. 

„Our managers faced criminal and administrative charges, our accounts were blocked, our properties were confiscated – all of them: buildings, vehicles, finances, probes, pipes, fields, probes and storehouses. Our companies Tolknineftegaz and Kazpolmunay [which are controlled by Ascom] were put on a dead line and their managers – Moldovan citizens – were arrested,” the same sources specified. 

In July 2010, Kazakhstan’s Ministry of Oil and Gas cancelled the agreements for field exploration and extraction with Kazpolmunay and Tolkinneftegaz. Their entire infrastructure and installations were transmitted into custody of KazMunayGas, a publicly-owned company.

On September 8, 2010, Anatol Stati and Ascom Group filed a legal action at the Stockholm Arbitration Court against the Kazakh Government over illegal expropriation. Mr Stati sid Kazakhstan violated the International Energy Chart Treaty. 

In December 2013 the Stockholm Arbitration Court awarded victory to Ascom Group and obliged the Kazakh Government to pay half a billion dollars in damages to Anatol Stati. Kazakhstan refused and filed for an appeal. 

The assets which the Stati family owned in Kazakhstan were valued in 209 at more than 1.55 billion US dollars and the size of investments exceeded 930 million dollars. 

Voronin is Still Awaiting Payback 

Much larger is the harm which ex-president Vladimir Voronin brought about Moldova. If the Kazakh gas deal between Ascom Group and the Moldovan Government succeeded, at a price of 76 dollars the country would have saved until now around two billion dollars – except Transnistria – or about six billion dollars together with the separatist enclave. 

The country also missed investments which would have modernized its energy sector. 

”Because of Vladimir Voronin, Moldova has lost unique opportunities. However, punishment is a consequence to the crime committed by Mr Voronin against Moldova and against the Stati family business in Kazakhstan. Let me assure you: a payback is inevitable, it’s just a matter of time,” Mihai Maler, chief of staff at Ascom-Grup, told Mold-Street.com.

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This article has been produced as part of the Project „Investigative reporting for transparency in public finance management and government integrity”, which is implemented by Mold-Street.com. No prior permission or copyright is applicable for republication of this piece entirely or in part and no prior agreement from Mold-Street.com is necessary to quote it.

This article has appeared thanks to the generous support of the American people via the U.S. Department of State. The opinions and conclusions herein do not necessarily reflect the stance of the Department of State or the United States Government.