A Thirty-Year Gas Cooperation between Moldova and Russia Is Definitely Over

Christian RUSSU

Our authorities not only took away the Moldovan gas transmission network from Moscow in favor of Romania, but also confronted the Russians with the denial to repay historical gas debts

Early September was full of important developments in the ongoing rupture of energy ties between Moldova and Russia. Firstly, Moscow was forced to hand over the Moldovan gas transmission networks to Romania. Secondly, official Chisinau actually refused to repay historical debts of the right bank to Gazprom. The formal transfer of the rights to manage gas transmission through Moldova to Transgaz, a subsidiary of the Romanian state company, was voluntary and without any resistance from Russia. In fact, the main networks had been used in the interests of Romanian companies even before that moment, and Gazprom couldn’t influence it in any way. The contract for the management of the Moldovan GTS for a five-year term will enter into force on 19 September, which is presented to the Romanian community as an epochal achievement. Bucharest officials are already including the area beyond the Prut in their energy programs. The results of the audit of the right-bank Moldova’s historical debts presented amidst this background can be regarded as an accompanying political gesture, which put an end to the thirty-year gas cooperation between Moldova and Russia under the patronage of the latter. Note, from the very beginning the audit initiated by our authorities by Wikborg Rein Advokatfirma AS and Forensic Risk Alliance &Co was not perceived favorably in Moscow, as they understood the real goals of the ruling party. The choice of auditors and the terms of reference for the final documentation were determined by the government on its own, without consulting the Russians and Moldovagaz. While still being a representative of the non-governmental sector, the current energy minister Victor Parlicov spoke out against the very idea of paying something to Russia. His colleague Sergiu Tofilat, now a board member of Moldovagaz, who advised the auditors, recently expressed a similar opinion about the unreasonableness of Gazprom’s financial claims. Even so, such a defiant and dismissive attitude of the authorities when announcing the audit results surprised many. It is more about the principles of basic politeness. The Ministry of Energy sent the audit report to Moldovagaz management only half an hour before its contents were made public. It is possible that Gazprom did not receive it until the morning of 6 September. Now let’s talk about the results. Out of the total debt of 709 million U.S. dollars as of March 2022, Chisinau considered it appropriate to pay back to Gazprom just over one per cent – 8.6 million. Repaying the remaining sums was deemed inappropriate due to a variety of reasons: insufficient documentary justification, delayed claim rights, formal possibility of filing counter-financial claims. One of the reasons for complaints about the financial activity of Moldovagaz was investments in the construction of administrative buildings in Chisinau and Ungheni, although these are investments in the infrastructure of our cities. There were also other complaints about the expenses of the company’s management, given that the the Moldovagaz management board was in recent years chaired exclusively by our fellow citizens, while the SIS staff supervised their activities. In other words, Moldovan citizens and officials who cooperated with Russians in the interests of their country lost favor with PAS. The authorities did not even bother with the legal clarity of the audit. It was explicitly stated that the aim of the audit is not to protect the interests of Moldovagaz before Gazprom in national or international arbitrations, but to serve as a formal tool in articulating the country’s position. Someone can explain the authorities’ decision not to recognize the documents on debts between Moldovagaz and Gazprom, but the existence of debts was admitted in other institutions too. For instance, in November last year, the Court of Accounts presented the data of its audit as of the beginning of 2022, with the figure of 590.8 million US dollars. That is, the official position now is that nobody intends to pay Gazprom anything regardless of its reaction, and Moldova’s historical debts can no longer be an argument in gas relations with Moscow. Especially since Bucharest is the subject in relations from our side, and the energy sector of the country is supported by Brussels. The entire leadership, Maia Sandu, Igor Grosu and Dorin Recean, rushed to inform about such innovations. The government and parliamentary sessions were specially convened for the latter’s speech. While these statements are clearly intended for an external audience, there is also an obvious internal political context related to the upcoming local elections. The main message to the population is that the ruling party managed to protect every Moldovan family from the prospect of paying one thousand dollars to the Russian gas monopoly. To be fair, the demonstrative disregard for Gazprom’s interests was also possible because the Russians had failed to show any clear intention to defend their positions. Since last May, there was an impression that the company had let go of the situation with the fulfilment of Chisinau’s obligations under the gas contract, including the audit. So, the current government had enough time to get the necessary figures and conclusions from the British and Norwegian auditors. Let me recall, the government had long delayed paying the auditing companies their due fees of 800,000 US dollars, and in the end, it even decided to add 350,000 dollars for allegedly additional work. Meanwhile, Gazprom’s response was very restrained, which confirms that there is no strategy in the Moldovan issue or opportunities to implement it at this stage. For PAS, the successful closure of the right-bank gas debt, in addition to electoral dividends and the approval of Western partners, is only an intermediate result in the further displacement of the Russian energy presence in the region. The next issue that Moscow will be offered to solve in a similar scenario, perhaps as early as next year, will be the debt of the left bank. However, it seems that in this case Chisinau will not agree to pay a dime.