• Andriy KobolyevThe document you are holding is more than just a report on the group's performance in 2016. It is a three‑year summary of the work done by the current management team of Naftogaz. The company's major achievement is being in the black for the first time in the past five years, with no support from the state budget for the first time in the past decade.

    We also have a number of additional accomplishments to be proud of. Naftogaz is the top taxpayer in Ukraine. Besides providing a secure gas supply to Ukrainian households, we ensure sufficient supplies for all other consumer categories regardless of circumstances, be it an unusually long cold winter or Gazprom refusing to supply gas to Ukraine when coal reserves are well below the minimum. Thanks to diversification of suppliers, effective stock management, and cooperation with international financial organizations, we are now optimizing our major expenditures. In 2016, we managed to end a multi‑year downward trend for Ukrgazvydobuvannya gas production, and we plan to achieve significant growth for the first time in 2017. Transparency and a systemic struggle against corruption are not just attractive catchphrases; they have become key elements of our corporate culture, which, among other things, has made us the biggest user of Ukraine's corruption‑beating ProZorro e‑procurement system. As of the date of this address, we have received a separate award from the Stockholm Arbitration
    Tribunal in the Gazprom vs Naftogaz case, which fully rejects the "take‑or‑pay" claim of the Russian side in excess of USD 44 billion.

    The above‑mentioned achievements represent the perseverance and efforts of many people. While very different at first glance, they have one thing in common that serves as the key to the success for any team ‑ this thing is shared values. These values formed the foundations of our strategy in 2014.They have helped us to make tough but important decisions. They
    are at the core of the group's new strategy that we have submitted for approval to our shareholder — the government of Ukraine.

    Our core values are integrity and trust: we are honest and reliable in relations within the group and with third parties. They also include transparency: we are open and objective when interacting, both inside and outside the group. Most of all, we appreciate professionalism: we are dedicated to professional development and adhere to the highest ethical standards. Finally, we ensure fairness: we are consistent and meritocratic with all our customers, employees, competitors, and the state.

    I am very grateful to the people who share our values, both within Naftogaz and outside the group. You have led the group to success despite the reckless resistance of the "old system". In 2016, this resistance continued to pose a key threat to gas market reform, with Naftogaz as an integral part. It was the number one threat. Fighting against this internal enemy turned out to be much harder and more dangerous than any arbitration. I am convinced that in the near future we will succeed in this battle too, and will move forward to new victories.

    Sincerely,
    Andriy Kobolyev