Gazprom blames Ukraine for high expenses

MOSCOW, Sept. 11 (UPI) -- Russian energy company Gazprom said Thursday it attributed an increase in operating expenses to its account with Ukraine.

Gazprom issued its results for the first quarter of 2014, saying its net profit declined 41 percent year-on-year to $6 billion. Revenue for the gas company was up 7 percent, while operating expenses increased 15 percent.

The Russian natural gas company said the "major factor" leading to the increase in operating expenses was "mainly related to doubtful trade accounts receivable of Naftogaz Ukraine."

Gazprom in June cut natural gas supplies to Ukraine because of ongoing disputes over debt. Russia this year offered some concessions to their Ukrainian energy counterparts, though the government in Kiev said it was wary of Russian intentions in the aftermath of the November pivot in Ukraine toward the EU.

The European Union has tried to break the Russian grip on the regional energy sector while at the same time searching for a resolution to ongoing spats between Gazprom and its Ukrainian clients.

Gazprom sales of natural gas to Europe increased 3 percent to 1.6 trillion cubic feet. Sales to members of former Soviet Union, which includes Ukraine, declined 10 percent year-on-year to 575 billion cubic feet.

Total gas sales for Gazprom declined 4 percent.