Bloomberg News

Billionaire Firtash Made Fortune in Turkmen Food-for-Gas Deals

February 01, 2009

Ukrainian billionaire Dmitry Firtash, who is challenging his government’s gas accord with Russia, made his fortune in food-for-gas deals with Turkmenistan and rose to become a pivotal figure in the energy trade in the region.

Firtash owns 45 percent of Swiss-registered RosUkrEnergo AG, which has had Ukraine’s gas import monopoly for the past three years. A deal between Russia and Ukraine, settling a dispute last month which halted gas to Europe for almost two weeks, threatens RosUkrEnergo’s role, since Russian Prime Minister Vladimir Putin said middlemen would be eliminated.

The 43-year-old investor’s net worth is estimated at $3.8 billion, according to Polish magazine Wprost, and his businesses interests have grown over the past 15 years to include energy, chemicals, and pipeline construction.

“I don’t have a formal education, but I learn every day,” he said in a Bloomberg Television interview in Kiev yesterday. “The main thing is to be able to listen.”

Firtash was born in the village of Bohdanivka, in western Ukraine. His mother still lives in the first home he bought about two decades ago, a three-room apartment in Chernivtsi, a city of 242,000 people close to his birth place.

“I was so proud of myself when I bought my first apartment, my first car -- a deviatka, one of the most advanced models of Soviet-made cars,” Firtash recalled. “Today, it’s not business that matters to me. It’s my country that matters. I want every Ukrainian be proud of his Ukrainian passport.”


Firtash, the only child of a driving instructor and an accountant at a local sugar beet processing plant, was brought up to rise early each morning, a typical schedule for rural people under the Soviets as people worked in their greenhouses and backyards growing vegetables for sale before heading to work. Now he often works through the night until 5 a.m.

“It’s not hard, I enjoy it so much,” he said. “What was hard for me was working in those greenhouses that my parents owned.” He says he still calls his mother every day and she visits him often.

Firtash is one of the most private of the billionaires of Eastern Europe and former Soviet Union, and declines to comment on how much he is worth.

“Years ago, my mother taught me that you have as much money as you have in your desk drawer, the rest is uncertain,” Firtash says. “I’ve made enough for myself and my family. I don’t eat with two spoons. I eat just enough.”

Fire Service

He graduated from Donetsk technical school with a qualification in railways in 1984, served in the army and then worked as a fireman in Chernivtsi.

“When you are young you have no fear, you even like it,” he says of his work as a fireman. “I quit because I worked for a year and never received any pay. And yet I had to feed myself.”

He moved to Moscow in the beginning of 1990s and secured his first gas deal with the Turkmen government in 1993, in exchange for food supplies, a transaction that laid the foundation of his wealth.

“The money that I had wasn’t enough, so I pulled together other people and we began food shipments from Ukraine and Russia to Turkmenistan,” he said in the interview in his office on the 31st floor of a Kiev office tower. He sold food to Turkmenistan’s trade ministry. “We saw a huge market, and we were promised a good price, but they weren’t able to pay with money and offered barter for gas. We took it and shipped to Ukraine.”

Gas Deal

Throughout the 1990s he continued to get fuel from Turkmenistan in exchange for food, to sell on to Ukraine. He also expanded his ties with former Soviet countries in the region and began gas purchases from Uzbekistan and Kazakhstan. Soon he had so much gas contracted from Central Asia that he had to use Russian gas pipelines to get it to Europe.

“When you have a lot of gas, the only way to send it is a pipeline,” Firtash said. “And if you send a lot of gas from Central Asia, you can’t bypass Russia. In 2002, when we got huge volume of gas in Asia, I approached Gazprom. I sent them a letter. They accepted that offer.”

RosUkrEnergo, the trading company in which he now owns a 45 percent stake, was set up in 2004 by “top Russian and Ukrainian politicians” to import Central Asian gas into Ukraine, according to its Web site. It also supplies Eastern European countries. Russia’s OAO Gazprom also owns 50 percent of RosUkrEnergo and the remaining 5 percent belongs to Ivan Fursin, a long-time business partner of Firtash.

RosUkrEnergo emerged as a monopoly supplier of gas to Ukraine in 2006 under the agreement that settled a dispute that year between Ukraine and Russia, during which Gazprom gas shipments to Ukraine were cut for three days of January, leading to shortages in the EU countries, including Hungary and Austria.

Chemical Cycle

He consolidated his assets into holding company Group Dmitry Firtash or GDF in June 2007. He owns companies including the Hungarian gas trader Emfesz Kft, Vienna-registered Zangas Hoch-und Tiefbau GmbH, which repairs and builds pipelines and OSTCHEM Holding AG that controls a number of chemicals companies, according to the GDF’s Web site.

“I was blessed,” he said. “Did I ever think this is what I would become? I knew as I was growing up that my maximum achievement under Soviet rule would be to become an engineer.”

He has also some real estate assets, according to the Web site, and said Nov. 7 he plans to acquire a majority stake in VAT Bank Nadra, Ukraine’s seventh-biggest bank by assets, to diversify and expand his business.

Firtash declined to comment on companies he owns in Ukraine and abroad, except for saying he invests in the chemical industry. “I just like it,” he said. “I know its whole production cycle pretty well.”

To contact the reporter on this story: Daryna Krasnolutska in Kiev at Halia Pavliva in Kiev via New York newsroom at Or

To contact the editor for this story: Chris Kirkham at Steve Stroth at

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