Western energy majors that are knocking on Ukraine’s door, hoping to profit from a potential shale gas bonanza, would be wise to study the sour experiences of US power giant AES.
The US-based company announced earlier this month that it had agreed to sell two regional electricity distributors – Kyivoblenergo and Rivneoblenergo – to a Russian group called VS Energy.
In a conference call on Wednesday summing up its 2012 financial results and looking on into 2013, AES revealed that it had agreed – pending regulatory approval – to sell both assets to VS Energy for a combined $113m.
That is a bit higher than the $70m AES paid for both companies during a 2001 privatisation, but, as AES pointed out in a press release , it estimates losses due to impairments will be “approximately $20 million in 2013 related to the sale of the Ukraine utilities.”
