The story
Founded by Cabinet of Ministers of Ukraine in 1991.1
1991–1998: Ukrgasprom
After the dissolution of the Soviet Union in 1991, the oil and gas industry of Ukraine, governed by Derzhnaftogasprom (State Committee for Oil and Gas), went through a number of changes. The National Energy and Utilities Regulatory Commission (NEURC) was giving out certification for gas trading to anyone without order ignoring the Derzhnaftogasprom. Guided by decisions of the First Vice-Prime Minister (on Fuel and Energy Complex) Pavlo Lazarenko, licenses were given to such companies like United Energy Systems of Ukraine (EESU), Intergas, Olgas, International Trading Energy Resources Association (ITERA), Ukrzakordonnaftogas, Ukrgasprom, Motor Sich, and Donetsk Oblast factories (later those formed the Industrial Union of Donbas).
In the early 1990s, there was privatization of gas distribution regional network known as "oblgaz" belonging to "Ukrgas". When Naftogaz was constituted, not all privately owned distributors wanted to transfer their own stocks to the statutory fund of the National Joint Stock Company. Along with the gas distribution network in the same way there were privatized enterprises of petroleum products provision including filling station and fuel repositories that belonged to "Ukrnaftoprodukt". The whole petroleum products retail network had to be created by Naftogaz from zero.
The predecessor of Naftogaz is "Ukrgasprom".
On 28 January 1995 after discussion with government the condition of agreements realization in provision for Ukraine gas imported from Russia and Turkmenistan, the head of "Ukrgasprom" Bohdan Kliuk was dismissed from his post on decision of the Cabinet of Ministers. Bohdan Kliuk who was appointed on 6 December 1994, on 19 December 1994 signed an agreement with "Gazprom" on distribution of gas for Ukraine under disadvantageous conditions. The issue with Kliuk provided Bakai with an argument to create Naftogaz.
1998–2014
The company was founded in 1998 after previously being named Ukrgazprom. The main initiators who created the company were Ihor Didenko and Ihor Bakai (better known as Igor Bakai). The last one was the first deputy chairman of the Ukrainian State Committee on Oil and Gas. Before Naftogaz, both Bakai and Didenko worked for other gas trading companies "Republic Corporation" and "Intergas".
At the end of the 1990s, Ukraine was consuming a record of 75 billion m3 per year which was the fourth indicator in the world and seemed strange to say the least considering that the country was not part of the top 20 in GDP volume. Eighteen billion m3 were mined inside Ukraine by Naftogaz along with some joint enterprises such as "Poltavska Naftogazova Kompania", Plast, Ukrnaftogastekhnologia and others. All the gas that was mined by Naftogaz and received through transit in obligatory order was being sold to population and state organizations. The remaining volume of natural gas, Ukraine was receiving from Russia as part of payment for transit or was buying from Turkmenistan. That gas was sold to industrial enterprises or was being re-exported.
Also, instead of investing more funds in geological exploration for the Ukrgasprom, its money was used to patch budget and foreign debts holes, which led to decrease in mining of hydrocarbons and decline of industry. Most of the oil refineries were sold out to Russian companies. The only refinery that belongs to Naftogaz is Shebelynsky Gas Refinery which Naftogaz controls through Ukrgasvydobuvannia.
Ukraine never had enough mined oil resources capable to provide for oil refining capacity that Ukraine inherited from the Soviet Union. Most successful in oil mining is Ukrnafta, however recently Chornomornaftogaz had more and more plans to develop newly found deposits.
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Before 2001 Ukraine had two state enterprises in transportation of oil "Main oil pipeline "Druzhba" and "Cisdnieper main oil pipeline". The pipelines were often used by Russian companies, but after Ukraine built connecting pipeline Odesa – Brody (Black Sea coast – West Ukraine) Russian companies installed an alternative pipe route Sukhodolnaya–Rodionovskaya.
In 2001 several Ukrainian parliamentarians made inquiry to the Prosecutor's General Office, Tax Agency, and Security Service requesting to open a criminal case against the head of Presidential Administration Volodymyr Lytvyn, the former chairman of Naftogaz Ihor Bakai, the administration chairmen of joint-stock company "Ukrgasprom" Bohdan Kliuk, the director of state enterprise "Ukrgasprom" Illia Fik, and others. Those parliamentarians were Hryhoriy Omelchenko, Anatoliy Yermak, and Viktor Shyshkin.
As of 31 December 2008, Naftogaz with its subsidiaries had a total of 172,000 employees. Naftogaz received more than $6 billion of subsidies in domestic bonds from 2009 to 2012 as regulated gas prices and expensive Russian energy imports led to heavy losses.
The 2009 Russia–Ukraine gas dispute was eventually settled by the 2010 Kharkiv Pact.
2014–present
In August 2014, Ukrtransgaz, the operator of the Ukrainian gas transport system, along with its Slovak counterpart "Eustream", launched natural gas supplies from Slovakia to Ukraine after signing a Memo of mutual understanding in April. This initiative was driven by Russia's decision in June to cease gas supplies to Ukraine in retaliation for the country seeking closer ties with the European Union. By launching reverse flows, Ukraine claims it is seeking no concessions – only implementation of existing EU law on EU territory. The Third Energy Package was proposed by the European Commission in 2007 and adopted by the European Parliament and the Council of the European Union in July 2009. This legislation allows for gas to be traded like other commodities, thus creating a more efficient market which is theoretically less vulnerable to political pressure. In October 2014 the EU further committed to better connecting its energy grids, setting a target of member countries exporting 15% of their generation capacity by 2030. The consultancy firm Strategy& (formerly Booz & Co) believes the EU could save €40bn a year by 2030 if it integrates its energy grids.
Norway's energy giant Statoil began transiting gas eastwards from Slovakia in 2014, and Shell began in 2015.
In response to the reverse flows initiative, Russia has cut supplies to central and eastern European countries, seeking to prevent exports to Ukraine. In September, Hungary stopped supplying gas to Ukraine, days after a meeting between Hungarian Prime Minister Orban and Gazprom's CEO. Gazprom charges widely different prices to different European countries, which many believe is based on Russia's political goals in the region.
In June 2014 Ukraine sought redress from the Stockholm Chamber of Commerce Arbitration Institute to fairly assess past debts between the two countries and to establish a fair basis of future operations.
In March 2018, Naftogaz won a trial against Russian Gazprom for shortened gas supplies before the Arbitration Institute of the Stockholm Chamber of Commerce, and was set to receive net amount of $2.56 billion.
As of 31 December 2017, Naftogaz had around 72,000 employees and annual revenue of €7.443 billion. Of total revenue, €2.908 billion (39.07%) is generated from oil and gas production, €2.415 billion (32.45%) from oil and gas transit, €1.137 billion (15.28%) from oil transmission and sales and €817 million (10.98%) is generated from gas transmission and sales. A total transit volume in 2017 stood at six-year maximum of 93 billion cubic meters. Russian gas flows via Ukraine were suspended on January 1, 2025, following the expiration of the five-year transit deal signed in 2019, after which Ukraine ceased to be the main transit country of Russian gas to the European Union countries.
In April 2019, the Chinese Sinosure agreed to loan $1 billion in insurance coverage to Naftogaz.
In October 2019, Naftogaz was involved in the impeachment proceedings against President Donald Trump in the US, when news broke that a group of businessmen alleged to be very close to the President and his personal lawyer, Rudy Giuliani, intervened in an attempt to change the management of Naftogaz. An Associated Press report reveals how businessmen Lev Parnas, Igor Fruman and Harry Sargeant III allegedly attempted to replace Naftogaz's CEO, Andriy Kobolyev, and sought to broker a deal to sell their own natural gas to the company.
In the first half of 2022, Naftogaz had a deficit of $1.6 billion and as a consequence, went into default.
In October 2023, the head of Naftogaz, Oleksiy Chernyshov, said that the company does not plan to renew the contract with Russian gas company Gazprom, which ends at the end of 2024. He named the needs of European partners as the only reason why Ukraine still pumps Russian gas.
On 14 May 2025, Sergii Koretskyi was appointed to Naftogaz Group CEO.
The European Bank for Reconstruction and Development (EBRD) gave Naftogaz a €500 million loan in August 2025. The 2 year loan will assist Naftogaz to finance emergency gas purchases and it was signed with 90% guarantee from the European Commission.
In October 2025, Russia attacked the Naftogaz facilities located in the northeastern Kharkiv and central Poltava regions. The sites were hit from fired missiles and drones which damages a large area of the facilities.
2026 seizure of Russian state assets to compensate Naftogaz
In June 2025, the Federal Supreme Court of Switzerland ruled in favour of Naftogaz over its September 2022 claim against Gazprom, which refused to fully pay for gas transit services under the 2019 Russia-Ukraine Gas Transit Agreement (which expired on 1 January 2025) since the beginning of the 2022 Russian invasion of Ukraine. The Swiss Supreme Court ordered Gazprom to pay 1.4 billion USD to Naftogaz for breach of contract. In May 2026, the Astana International Financial Centre Court in Kazakhstan recognised the Swiss ruling, and granted permission to enforce this arbitration award in Kazakhstan.
In early June 2026, the National Enforcement Authority of Finland provisionally seized 3.7 million euros in Russian state funds intended to compensate Naftogaz for its losses suffered by Russia's seizure of Naftogaz' assets in occupied Crimea since 2014. Naftogaz and its subsidiaries had filed a compensation claim against the Russian Federation, and in 2023, the Permanent Court of Arbitration in The Hague ordered Russia to pay approximately 4.3 billion euros in compensation to Naftogaz. International law stipulates that countries which recognise the ruling (which Russia does not), can enforce it within their jurisdictions by seizing Russian state assets, and the Helsinki District Court in late May 2026 approved the enforcement of 2023 ruling. The 3.7 million euros come from a defunct cross-border cooperation programme from the European Union involving Finland and Russia, to which Russia had contributed about 3.7 million euros before it launched its full-scale invasion of Ukraine in February 2022. As the programme was subsequently terminated in response to the invasion, the funds remained under control of the Finnish Ministry of Economic Affairs and Employment until the temporary seizure in June 2026; if the ruling becomes permanent, the money would be given to Naftogaz in compensation.
From Wikipedia’s article on Naftogaz, shared under CC BY-SA 4.0.4