Ukraine's Naftogaz $4B in debt

KIEV, Ukraine, March 16 (UPI) -- Naftogaz, the embattled Ukrainian national energy company, is more than $4 billion in debt with some of that debt backed by gas in storage.

Naftogaz in February warned it faced difficulties meeting its debt obligations to Russian energy giant Gazprom due to a sagging economy and arrears from regional utilities.

The company had agreed earlier to settle $360 million in debt to Gazprom following warnings of gas disruptions. A January row over arrears between Russia and Ukraine disrupted gas supplies for weeks.

Naftogaz is required to repay $3 billion in loans by the end of the year, on top of another $500 million in interest, RIA Novosti said, citing Ukraine's Russian-language business daily, Delo.

The report said Naftogaz owes money to seven foreign financial institutes, which puts an additional strain on the debt as the Ukrainian hryvnia has depreciated 40 percent compared to foreign currency.

The hyrvnia is currently worth 12 U.S. cents. Gas prices on world markets are also in decline.

Ukrainian Prime Minister Yulia Tymoshenko said last week that lawmakers moved on a financial package for the energy company as the Ukrainian economy limps along in the global recession.