OREANDA-NEWS. April 12, 2012. Vladimir Makeev, Chairman of the Management Board of ITERA Oil and Gas Company, took part in the meeting held on April 6, 2012 in Ekaterinburg with Aleksander Misharin, Governor of Sverdlovsk Region, for discussing gas supply issues and developing efficient measures to address the issue of Sverdlovsk Region consumers’ debts for supplied natural gas.

The meeting was also attended by Sergey Zyryanov, Head of the Governor’s Administration, Ministers of Sverdlovsk Region: Nikolay Smirnov, Minister of Energy and Housing and Utilities, Konstantin Koltonyuk, Minister of Finance, Dmitriy Chulichkov, Deputy Prosecutor of Sverdlovsk Region, Alexander Eremin, General Director of CJSC “Uralsevergaz”. Heads of municipal entities having the largest gas debts were also invited to participate in the meeting.

The need to hold the meeting was caused by the worsening issue of consumed natural gas settlements in Sverdlovsk Region in the heating season which is about to end. In the beginning of April 2012, the Sverdlovsk Region gas consumers aggregate debt in front of the key gas supplier - CJSC “Uralsevergaz”, ITERA Oil and Gas Company subsidiary, and the Government of Sverdlovsk Region, - amounted to 4.845 billion Rubles, including 4.143 billion Rubles, or over 85% of the debt, owed by housing and utilities companies.

The meeting was provided with and discussed measures developed by ITERA Oil and Gas Company and CJSC “Uralsevergaz” to address the issue of gas debts of regional housing and utilities companies and to normalize their settlements for supplied energy carriers:

• entering into gas supply contracts with debtors for a "season" period: the existing contract expires in May and no new contract would be executed until debts for the gas supplied earlier have been settled;

• entering into future gas supply contracts only with those housing and utilities companies which own gas consuming equipment (boilers), or adopting regulations that envisage joint liability for lessors of the equipment (which is usually owned by a municipal entity) within lessors’ obligations;

• execution (along with a standard gas supply contract with consumers) between CJSC “Uralsevergaz” and a relevant municipal entity (ME) of the contract of gas supply for municipal needs in the quantity required to meet the needs of problem consumers of the housing and utilities sector. Within the contract, the ME would be responsible for ensuring timely payment by the gas consumers;

• issue by heads of problem MEs of organizational and legal guarantees that by the following heating season, each accountable area would be provided with a transparent scheme of heating services provision and cash flow throughout the entire chain: "gas supplier – heat supply organization – utility services company – gas consumer" and that independent settlement centers responsible for collection and target allocation of payments for energy resources would be engaged.

In addition, the meeting discussed practices of restrictions (cessation) of gas supply to debtors after the end of heating season as the most efficient instrument of forcing to pay for consumed gas, and other proposals aimed at improving settlements for supplied gas with consumers.

“We believe the proposed measures would significantly strengthen the payment discipline of gas consumers – housing and utilities companies”, - said Vladimir Makeev. “We support all decisions taken by the Governor to address the debt issue, including more active involvement of law enforcement agencies to stop housing and utilities companies’ deliberate bankruptcy practices, “schemes” under which boilers are leased each season to succeeding “housing and utilities businessmen” or transferred for use to new municipal unitary enterprises”, - noted the Chairman of the Management Board of ITERA Oil and Gas Company.