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. Last Updated: 07/27/2016

Ukraine Will Speed Up Future Debt Payments

Ukrainian Prime Minister Viktor Yushchenko promised Friday to pay Russia for oil and gas on time in future, news agencies quoted him as saying.

Prime-Tass quoted Yushchenko as saying his country would introduce a range of measures, mainly by tightening payment discipline on the domestic market, to make timely payments for Russian gas.

Differing official figures put Ukrainian debts for Russian gas delivered by monopoly Gazprom at between $740 million and $2.2 billion.

Itar-Tass quoted First Deputy Prime Minister Mikhail Kasyanov as praising Yushchenko's aims, saying: "Russia welcomes progress in solving the debt problem because the energy sector is the backbone of our cooperation."

News agencies said Yushchenko met acting President Vladimir Putin later in the day.

"Unfortunately, relations between Russia and Ukraine in the energy sector have become acutely strained in recent months, and this is not in line with our policy of developing friendly relations with Ukraine," Prime-Tass quoted Kasyanov as saying.

A Russian delegation including Fuel and Energy Minister Viktor Kalyuzhny and Gazprom chief Rem Vyakhirev held talks with the Ukrainian government in Kiev on Thursday.

Gazprom agreed to restructure Ukraine's debts, but details of the plan are still being worked out.

News agencies quoted Kasyanov as suggesting Ukraine should cut its gas exports because its own domestic gas production accounted for a mere 18 percent of its needs.

"It is not really appropriate to export gas under these circumstances," he said. "We have asked the Ukrainian side to consider the question of Ukraine admitting this and announcing it should not export natural gas."

Ukrainian state oil and gas company Naftohaz Ukrainy says it does not export gas. Official statistics show the country exported $50.5 million worth of gas in the first 10 months of last year.

Prime-Tass also quoted Yushchenko as saying he and Kasyanov had agreed to renew negotiations on freeing trade between the two countries, to start Monday.

Yushchenko also met Anatoly Chubais, head of Russian national power grid Unified Energy Systems earlier in the day, to discuss Ukraine's debts to the company, Prime-Tass quoted a UES spokesman as saying.

Ukraine has failed to make a $18 million payment on bonds issued through Chase Manhattan Bank Luxembourg SA, but said it was working on a debt restructuring offer to be disclosed by Feb. 4, The Associated Press reported Friday. Ukraine's failure to make the payment on the dollar-denominated bonds, scheduled for Thursday, gave creditors the right to announce a default.

Ukraine's foreign debt amounts to about $12.5 billion, of which more than $3 billion are due in 2000 and about the same amount in 2001.