By Brian Bonner

Andriy Kobolyev, the CEO of the state-owned Naftogaz company, said that foreign investors are no longer naive about Ukraine and are asking pointed questions about the independence and reliability of Ukraine’s court system before willing to commit to the country.

Kobolyev made the remarks as he opened the Nobles Fortune consulting company’s “Conductors of Change” conference on Nov. 13 in the Hilton Kyiv. His 45-minute talk was moderated by ex-Ukrainian Economy Minister Aivaras Abromavicius. The full agenda of the event is available here.

Kobolyev’s remarks made it clear that the leader of one of the largest and most powerful companies in Ukraine considers the nation’s transformation unfinished. Besides independent courts, Kobolyev said that Ukraine needs to be more effective in competing in international markets and needs effective regulatory institutions.

Kobolyev has taken heat for a multimillion-dollar compensation package for him and top managers, but he said that Naftogaz has delivered results and that it’s better to earn a high salary and bonuses honestly rather than take the even more lucrative route in energy of corruption.

Naftogaz has delivered spectacular financial results under Kobolyev’s watch and the increase in energy prices to households. During President Viktor Yanukovych’s corruption-riddled era, which ended on Feb. 22, 2014, with the EuroMaidan Revolution, the state gas company was a center for corruption, intermediaries and opaque deals — losing at least $6 billion yearly while enriching endure insiders.

Moreover, Naftogaz has scored victories in legal rulings that have benefitted the Ukrainian state. On Feb. 28, in a major ruling, the Stockholm Arbitration Institute ruled on the contract for the transit of gas through Ukraine and partially satisfied the claims of Naftogaz of Ukraine, obliging Gazprom to pay the Ukrainian company $4.63 billion for failing to supply certain amounts of gas under a transit agreement.

But problems in the gas sector persist.

For instance, Kobolyev noted that the state is probably losing at least 1 to 2 billion cubic meters of gas annually, now worth $350 million a year, because intermediary trading companies are allowed to hide from the public the true customers of gas. He suspects businesses are the true beneficiaries of subsidized prices that are supposed to go only to individual households. But he said parliament is rejecting legislation to make the information public.

For all Naftogaz’s successes, he admitted to some mistakes — communication to the public is one of them.

Critics would also say the inability of Naftogaz to unbundle – separate its production, transportation and distribution functions — is also holding back investment in a sector that has not seen a significant increase in domestic oil and gas production since the nation regained independence in 1991. Natural gas production, for instance, is stuck at 20 billion cubic meters a year.

Many of the old corrupt era would like to dislodge Kobolyev and his management team. Kobolyev’s five-year contract expires in March. Whatever happens to him, he said he will not enter politics in at least 5 to 10 years and would enter only if he became fed up with the political leaders completely.

Kobolyev said he has no time to let critics and criminal investigations bother him. When Abromavicius asked about his heroes and role models, he said they are all outside of Ukraine and are not Ukrainians.