Confiscation of Ukrnafta and Ukrtatnafta. Has the war between Zelensky and Kolomoisky begun?

In any case, the group “Privat” is now in a strategically bad position to start any campaign against the authorities

When it comes to the relationship between Volodymyr Zelenskyi and Igor Kolomoiskyi, hasty conclusions are especially inappropriate. These two people have a lot in common, so it’s hard to believe that their relationship could suddenly deteriorate.
It is not surprising that the news about the confiscation by the state of the two main assets controlled by Kolomoiskyi and her partners in the Privat group was met with skepticism at first. Even the official information was too lame and left room for imagination, as Dsnews writes in the Confiscation of “Ukrnafta” and “Ukrtatnafta”.
The National Commission for Securities and the Stock Market reported that in order to implement the decision of the meeting of the Staff of the Supreme Commander-in-Chief of the Armed Forces of Ukraine on November 6 due to military necessity, the state owned the shares of five strategically important enterprises, including PJSC “Ukrnafta” and PJSC “Ukrtatnafta”. “The confiscated shares acquired the status of military property, their management was transferred to the Ministry of Defense of Ukraine. After the end of martial law, in accordance with the requirements of the law, the specified shares will either be returned to the owners or their value will be reimbursed,” — that’s all that the NKCPFR considered necessary to explain.

Contractual?

Commentators in social networks competed in hypotheses. The opinion was also expressed that the confiscation of “Ukrnafta” and “Ukrtatnafta” could be doubly beneficial to Kolomoiskyi. First, he can receive compensation for the value of the shares at an inflated price without having to invest in the restoration of the Kremenchug refinery, which was destroyed by Russian missile attacks. Secondly, another consolation for him may be that he will not be included in the register of oligarchs. One of the criteria for the status of an oligarch is to be the ultimate beneficial owner of a business entity that is the subject of natural monopolies or occupies a monopoly (dominant) position on the market, i.e. has a market share of more than 35%. According to the results of 2021, the share of “Ukrnafta” in the total production of oil and gas condensate in Ukraine was 62.7%. In 2021, the Kremenchug Refinery of “Ukrtatnafta” increased its share in the Ukrainian gasoline market to 40%.
Another option was also discussed — that after the end of the war, both companies would be returned to Kolomoisky along with the investments that the state would invest in them. That is, this is such a cunning way of financing the oil business of the “Privat” group from the state budget.
However, the development of events has shown that there is no smell of any secret agreements here. On November 10, Ukrnafta asked Zelenskyi to “intervene in the situation, to stop the lawlessness that is being committed in the rear during the war.” She reported that her activities have been blocked by VEB and SBU employees for the third day without presenting a court decision, and her administrative office is being searched.
“For the third day, armed persons are in the office of PJSC Ukrnafta, they do not allow employees to work, they block all operational activities of the company, they prevent the execution of normal operational processes of production and processing. For the third day, all bank accounts of PJSC Ukrnafta have been blocked, the activities of the company are actually stopped,” the company complained.

If it was a contractor, then the transfer of the management of the company to the new chairman of the board of PJSC “Ukrnafta” Serhii Koretsky, appointed on November 10, would have taken place quietly and peacefully. Instead, the company’s office was blocked by the SBU. The SBU itself reported that its employees “are taking preventive measures to prevent the destabilization of the work of one of the largest oil refineries in Ukraine and to ensure that it is transferred to state ownership in working condition.”
An even more serious circumstance is that a criminal case has been initiated against the company’s management. It definitely does not fit into any contracts. The SBU announced that it is preparing a report on the suspicion of the company’s management under Part 3 of Art. 212 of the Criminal Code (evasion of taxes, fees, mandatory payments). According to the Bureau of Economic Security of Ukraine, the pre-trial investigation into this criminal proceeding is being carried out by the detectives of the Security Intelligence Service under the procedural guidance of the Prosecutor General’s Office and in cooperation with the Security Service of Ukraine.
“Employees of the BEB and the SBU are checking information about tax evasion by the management of one of the largest oil refineries in Ukraine. The illegal evasion scheme also involves a group of companies that supply fuel and lubricants. Their owner is one of the richest oligarchs in Ukraine,” the BEB reported. It is not difficult to decipher what the “Ukrtatnafta” refinery, “Ukrnafta” gas stations and Kolomoiskyi can mean here.
As a result, it was established that during the years 2019-2022, officials of several enterprises probably underestimated their tax obligations for excise tax. In particular, financial and economic transactions were hidden and not reflected in tax and accounting reports. According to the BEB, tax evasion can amount to more than UAH 700 million. “Authorized searches are being conducted in the office premises and the oil refinery with the aim of obtaining a documentary evidence base and preventing the destruction of items and documents that confirm tax evasion,” the message says.
But these are not all troubles for Kolomoiskyi. Another reason for the searches was information about possible violations committed in order to increase profits during the production of fuel. “Detectives are taking fuel samples for appropriate examination. Discovered and seized documents, items and things confirming the illegal activities of the mentioned enterprises will be recognized as physical evidence,” – suggests BEB.
For society, this is an even stronger information bomb than a message about “only” tax evasion. Because we are talking about the waste of fuel, which, in particular, was supplied for the needs of the army during a full-scale war. Let’s emphasize that this story will continue – now the fuel has just been taken for examination, and the results of the examination will appear in the investigation later.
War?
On November 11, “Ukrnafta” reported that its new director, Serhii Koretskyi, had begun his duties. According to him, the main task is to ensure the continuous operation of the enterprise in the conditions of martial law, to maintain stable volumes of hydrocarbon production and fiscal discipline. At the same time, the law enforcement officers completed investigative actions in the central office of the company. The work of the enterprise has been resumed.

So, the oil business was taken away from Kolomoisky along with gas stations. It is clear that the gas stations here as a bonus took first of all refineries, oil production assets and already extracted oil stored in the oil pipelines of “Ukrtransnafta”.
The factory in Kremenchuk is not working after the shelling, its restoration requires investments of about hundreds of millions of dollars. But it is objectively necessary for the country, especially during the Great War. And the state has much more opportunities now, during the war, to find (that is, to take in the West) money for the repair of refineries than from private owners.
Without this, the work of Ukrnafta, which extracted oil exclusively for the needs of the Kremenchug Oil Refinery, loses its meaning. Currently, the company continues production, but this oil is not delivered anywhere, but is sent to the pipelines of the state operator “Ukrtransnafta” and stored there waiting for the consumer.
Therefore, government intervention was probably necessary. “Such strategic enterprises should work for Ukraine’s victory,” Prime Minister Denys Shmyhal said.
Probably, “Ukrnafta” and “Ukrtatnafta” were taken away from Kolomoisky forever. An argument in favor of this version can be the fact that both companies were headed by Serhii Koretskyi. “This is an unprecedented event! It seems that we have the beginning of the creation of a state-owned vertically integrated oil company,” suggests Serhiy Kuyun, director of the A-95 consulting group.
It is known about Koretsky that in the late 1990s he joined the Continuum group, in 2013 he headed the WOG gas station chain, and in October 2018 he resigned and began developing his own chain of cafes under the Idealist Coffee brand.
“It was under Koretsky that WOG began to grow qualitatively,” Kuyun notes. , now the Deputy Minister of Economy. Vlad Voytenko is the chief trader of WOG and the first deputy general director of Ukrtransnafta. These two are doing well, I hope their former boss will not let them down either.”
Let’s assume the best, from the point of view of the interests of the state, development of events. Kremenchug Refinery, as promised by Shmyhal, Probably, “Ukrnafta” and “Ukrtatnafta” were taken away from Kolomoisky forever. An argument in favor of this version can be the fact that both companies were headed by Serhii Koretskyi. “This is an unprecedented event! It seems that we have the beginning of the creation of a state-owned vertically integrated oil company,” suggests Serhiy Kuyun, director of the A-95 consulting group.
It is known about Koretsky that in the late 1990s he joined the Continuum group, in 2013 he headed the WOG gas station chain, and in October 2018 he resigned and began developing his own chain of cafes under the Idealist Coffee brand.
“It was under Koretsky that WOG began to grow qualitatively,” Kuyun notes, now Deputy Minister of Economy. Vlad Voitenko chief trader WOG – first deputy general director at “Ukrtransnafta”. These two are doing well, I hope their former boss doesn’t let them down either.”
Let’s assume the best, from the point of view of the interests of the state, development of events. As promised by Shmyhal, the Kremenchug Refinery will resume work, and the fuel produced by it from Ukrnafta oil will meet the needs of the army and the state. But what will happen to this vertically integrated company after the war? It is unlikely that the state will simply give it to the “Privat” group. Rather, it is expected that it will be put up for open competition, and Kolomoisky will be paid severance pay.
For his part, Kolomoisky is hardly happy about all these events. But this does not mean that he will start taking any actions against Zelensky right now. A deterrent is the question of compensation after the war. Even if the confiscation of two companies came as a complete surprise to Kolomoiskyi, he will surely have the opportunity to discuss its size and payment term with representatives of Zelenskyi’s team.
The law says that compensation for forcibly expropriated property under the conditions of the legal regime of martial law, followed by full reimbursement of its value, is carried out during the next five budget periods at the expense of the state budget. So there is room for negotiations. In addition, another subject for bargaining may be the fate of the criminal proceedings opened by the BEB.
In any case, Kolomoisky is now in a strategically bad position to launch any kind of campaign against Zelenskyi. He can’t even tease “1+1”, because there is only one telethon, and attempts to conduct propaganda against the government threaten to be thrown off the air.
Therefore, it is quite likely that there is nothing to expect any public aggravation of relations, at least until the end with Russia. And then it can change too much.