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Ukrainian security service raids gas firm HQ

  Armed officers of Ukraine’s security service raided the headquarters of state energy firm Naftogaz on Wednesday as a power struggle between the president and prime minister took a new twist.

The SBU security service, overseen by President Viktor Yushchenko, said the operation was part of a criminal investigation into the company at the centre of a gas price dispute between Russia and Ukraine at the start of the year. Prime Minister Yulia Tymoshenko, the president’s former ally who is now his bitter rival, condemned the operation.

“They simply wanted to paralyze Naftogaz’s activity and destroy the gas distribution system in Ukraine, the system of payments. They wanted to frighten people,” she told reporters during a visit to Paris.

Ukraine is the main transit route for Russian gas exports to Europe, and the January row disrupted supplies to many countries until Tymoshenko ended it with a deal that was criticized by the president as a national defeat.

Yushchenko and Tymoshenko were allies in the pro-Western ‘Orange Revolution’ in 2004 but are now constantly at odds.

“The special services acted strictly on a lawful basis, within the framework of their authority as set down by legislation,” presidential spokeswoman Iryna Vannikova said in a statement on Yushchenko’s website. The president, Vannikova said, demanded “resolve and firmness” in tackling abuses. “The period of laxness and professional apathy in the security forces must end.”

A Reuters witness said the men entering Naftogaz offices were wearing black uniforms and helmets with visors. Security service spokeswoman Maryna Ostapenko described them as “an investigative group, not people in masks. And let no one at Naftogaz tell lies by saying they weren’t told about it.”

PAYMENT MADE

Russia’s gas export monopoly Gazprom said the raid could threaten Ukraine’s latest payment for Russian gas, due by the weekend. But Naftogaz said it had paid on Wednesday over 80% of its bill for February supplies. “Over 80% has been paid. The rest of the money will be transferred in the coming days -- before March 7,” Ivan Savin, a Naftogaz spokesman, said by telephone. He decline to specify what sum had been paid.

Transit gas monopoly Ukrtransgaz said gas flows were flowing to Europe uninterrupted. Ukrainian customs earlier said it had legally taken over 11 billion cubic meters of gas owned by RosUkrEnergo -- a gas intermediary between Russia and Ukraine long denounced by the prime minister as corrupt.

The January contract with Gazprom clinched by Tymoshenko eliminated RosUkrEnergo as a middleman between the neighbors.

“This is a fight over 11 billion cubic meters of gas which now belongs to Ukraine. The shadowy corporation, RosUkrEnergo, wanted to claim ownership, but the government will not allow that,” Tymoshenko said after her Paris talks with French President Nicolas Sarkozy.

Her first deputy prime minister, Oleksander Turchynov, said the raid and other legal action could destabilize Ukraine, already gripped by political disputes since the 2004 upheavals. The aim, he said, was to disrupt Ukraine’s efforts to pay its gas bills on time.

Ukraine’s key industries and its currency have been battered by the financial crisis. Yushchenko and Tymoshenko briefly abandoned their antagonism this week to make a joint submission to the International Monetary Fund to keep intact a $16.4 billion loan program. (Reuters)