Vogue Trading wants Ukraine to pay for the loss of Crimean fuel. The Ministry of Energy believes the company didn't lose the fuel, but rather sold it.
Ukraine's multi-billion dollar losses caused by the annexation of Crimea must be compensated by Russia, the Ukrainian authorities insist. Ukraine has prepared multi-billion dollar lawsuits to be filed in an international court. Some domestic businessmen have taken a different approach, believing that Ukraine should compensate them for their Crimean losses. WOG Trading (TM WOG), members of parliament Igor Yeremeyev and Stepan Ivakhiv is trying to sue the state for 88,2 million hryvnias for petroleum products lost in Crimea. The Ministry of Fuel and Energy does not plan to pay the money and accuses WOG Trading of fraud. LIGA Business Inform has investigated the reasons for the conflict between WOG and the state.
Expropriation
Following the annexation of Crimea, numerous Ukrainian state-owned enterprises were illegally transferred to Russian ownership. Among them is the state-owned Feodosia Enterprise for the Supply of Petroleum Products (FEPPP), which operates a marine oil transshipment facility in Feodosia.
The facility's design capacity allowed it to handle over 10 million tons of cargo annually, making it a key terminal for Ukraine's imported fuel supply. According to the Ministry of Energy, 570,000 tons of gasoline and approximately 460,000 tons of diesel fuel were shipped through the terminal last year. In the two years leading up to the annexation of Crimea, the terminal's largest clients included entities of Sergey Kurchenko's VETEK Group, Rompetrol Ukraine, Russia's Lukoil, and WOG.
At the end of March, Crimean authorities nationalized the Feodosia transshipment facility. In response, the Ministry of Energy and Coal Industry replaced the Feodosia Transshipment FPONP with the state-owned Enterprise for the Supply of Petroleum Products (EPSP), based in Kyiv, and transferred the transshipment facilities to its balance sheet.
"But at that time (mid-March – Ed.), the company's tanks contained up to 40,000 tons of petroleum products belonging to Ukrainian companies," the head of an oil trader operating in Crimea told LIGABusinessInform. "All, or almost all, of these volumes were sold in Crimea, since the peninsula was experiencing a shortage of petroleum products at the time, and supplies from Russia had not yet been established."
Compensation or earnings
VOG Trading was one of the companies whose fuel was stored at the Feodosia transshipment facility at the time of its nationalization. The company's tanks contained 2600 tons of gasoline and 16,600 tons of diesel fuel. These quantities were stored under a contract signed back in November 2013.
The WOG Group press service told LIGABusinessInform that following the nationalization of the Feodosia enterprise, the company was unable to sell this fuel. Consequently, in April, WOG Trading filed a lawsuit against PONP in the Rivne Oblast Commercial Court, demanding compensation for the loss of petroleum products.
"We handed over petroleum products to the Petroleum Products Supply Company for storage, but they never returned them to us," WOG said in a statement. "It's only logical that we were forced to go to court to get our property back."
On June 18, the court of first instance ordered the state enterprise to pay 88,2 million hryvnias to the All-Russian Society of the Deaf.
But the story doesn't end there. On September 5, the Ministry of Energy issued a statement accusing VOG Trading officials of fraud and document forgery.
The Ministry claims it learned of the lawsuit's pending appeal only at the appeals stage, as the jurisdiction for the case was changed following the signing of a surety agreement between VOG Trading and the little-known Kioil LLC (Rivne Oblast). According to the Unified Register of Legal Entities, this company is already in bankruptcy proceedings.
The Ministry believes that VOG Trading actually sold petroleum products located at the Feodosia transshipment point, after which it fabricated documents to collect a non-existent debt from the state.
In particular, according to the Ministry, the fuel movement reconciliation reports were signed by an unidentified person, A.V. Vasiliev, who was never appointed to the position of director of the PONP and did not perform his duties.
According to documents posted in the Unified State Register of Court Decisions, on March 23, the Feodosia enterprise sent a letter to VOG Trading stating that it was unable to unload fuel from its storage tanks due to a shortage.
"This letter was signed by the same A.V. Vasiliev, whose identity could not be established," the Ministry of Energy noted. "These circumstances confirm VOG Trading's attempts to recover funds by forging documents, falsifying evidence, and providing false information."
The Ministry also notes that VOG Trading's gas stations are operating successfully in occupied Crimea. "Therefore, all remaining petroleum products transferred for storage to PONP were successfully removed by VOG Trading and are subsequently used to enrich company officials," the ministry's statement reads.
WOG denies this statement. "WOG companies—neither WOG Retail nor WOG Trading—do not sell petroleum products in Crimea," the company's press service told LIGABusinessInform.
"The trader's and the state's desires are completely clear. WOG wants to recover its lost funds, and the state doesn't want to compensate for losses it has no direct involvement in," says Alexander Sirenko, an analyst at the consulting firm UPECO. "Until Ukrainian legislation is restored to effect in Crimea, there could be many more such disputes."
Evgeniy Golovatyuk, LIGABusinessInform
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