Alleged Gazprom interest RosGas buys Hungarian gas trader Emfesz

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Thursday, 7, May 2009 03:08:00 PM

Emfesz, the biggest player on Hungary's deregulated gas market, has been acquired by RosGas, registered in Switzerland, Emfesz spokesman Igor Gallyas said when asked by local newwire MTI on Thursday, confirming a report in Russian daily Vedomosti.

RosGas will soon announce the change in ownership, Gallyas said. Emfesz will soon sign a new agreement on long-term gas deliveries, he added.

On 28 April, Emfesz announced that it would stop importing gas from RosUkrEnergo (RUE), a company based in Zug, Switzerland and will instead buy gas from an unknown company RosGas AG, also located in Zug.

Up to that day Emfesz has been wholly-owned by Mabofi Holding, a company registered in Cyprus controlled by the Ukrainian businessman Dmitry Firtash. He is also the 45% owner of RUE - 50% of which is owned by Gazprom and 5% by Firtash's business partner, Ivan Fursin.

“RosGas is a company in Gazprom's network of business interests," Emfesz said in a statement.

“The new gas acquisition system of Emfesz is independent of Ukraine. Gazprom, whose interest is to keep Emfesz consumers supplied with gas, has played a role in shaping the system," it added.

Gallyas would neither confirm nor deny that Russia's Gazprom is behind RosGas.

Emfesz managing director István Góczi told Reuters the company should switch to the new supplier within a few days. Góczi said RosGas was controlled by Gazprom.

Emfesz, the second-largest local natural gas distributor which supplies about 20% of the Hungarian market by importing about three billion cubic metres annually, was forced to turn to another middleman for its gas supplies after RUE was removed from the Ukrainian - Central Asian gas trade in January 2009.

Gazprom's spokesman Sergey Kuprianov, sharply contradicted the allegation that the company was linked to Rosgas.

"It is well known that the only export channel for Russian gas is the company Gazprom Export. The company RosGas which was named today in the Hungarian media has no relation to Gazprom and is not part of the Gazprom Group," Interfax Ukraine cited him as saying on 29 April.


According to company records located by Jamestown Foundation, RosGas AG was first registered in Zurich, under the name IKRON AG on 10 December 2008 and changed its name eight days later to RosGas AG while relocating to Zug -only a few weeks before the Ukrainian-Russian gas conflict began in January 2009.

In an story titled “Gazprom's Murky Games in Hungary", Jamestown Foundation's Roman Kupchinsky claimed the two principle shareholders of RosGas are Andras Laki, and Tamas Grazda, a Hungarian national who also happens to be the M&A director for Emfesz and a member of the management board of Emfesz, Poland.

“The immediate suspicion is that RosGas AG is yet another in a long line of shadowy intermediary companies created by Firtash and Gazprom. However, in the case of RosGas this may mask a possible attempt by Gazprom to cut gas supplies to Firtash's Emfesz, as a precursor to a company takeover -vastly increasing its share of the Hungarian domestic gas distribution network," Kupchinsky said.

Political ties and mafia links

“Hungary has been a key target for the Russian state-owned Gazprom since the collapse of communism within Central Europe. Viewed as a potential major European gas hub, Hungary first became a target of the Kremlin in 2002 when the mysterious gas trading company, Eural Trans Gas (ETG) was registered in Budapest."

"That year ETG took over the contract from a Russian company, Itera, acting as the intermediary for supplying gas from Turkmenistan to Ukraine. ETG was a totally opaque structure which was later exposed as belonging to Ukrainian gas trader Dmytro Firtash and his partner, Ivan Fursin, a banker from Odessa with close ties to the administration of then-Ukrainian president Leonid Kuchma," Kupchinsky said.

“ETG was paid for its services with 13 billion cubic meters of gas by the Ukrainian side which it then sold on the European market for a considerable profit. Soon after it began trading, the company's owners were suspected of having connections to the Russian mafia. This was denied by the then-unknown owners of ETG, who instituted a number of libel suits against anyone alleging the company had mafia links. The Kremlin became nervous and closed down ETG in July 2004, replacing it with a new intermediary company, RosUkrEnergo (RUE)."

“The 50% owners of RUE were the same individuals that had established ETG, Dmytro Firtash and Ivan Fursin, while the remainder of RUE was owned by Gazprombank -which at the time a fully owned subsidiary of Gazprom. The Kremlin, for undisclosed reasons, claimed that it did not know the identity of Gazprombank's Ukrainian partners in RUE," Kupchinsky said.

According to the company website, one year before the dissolution of ETG, Firtash created a new Hungarian company: "Emfesz, the First Hungarian Natural Gas and Energy Trading and Service Provider Ltd., was founded in 2003 to develop a major gas and energy business in Hungary following the liberalization of the country's energy market with the passing of the Hungarian Gas Act in that year."

“Firtash presumably had the go-ahead to do this from Gazprom and a guarantee that he would be able to buy gas for Emfesz from RUE where he controlled 50% of the company," the author added.

“If RosGas begins supplying Emfesz with the large quantities of gas it is contracted to sell in Hungary, it will raise questions over the source of that gas. Is it possible that RosGas is another Gazprom scheme to possibly siphon off funds for the Kremlin and reward Firtash for his long-standing loyalty to the Kremlin," Kupchinsky concluded. Click here for the full story.