Ukraine just got a new Prime Minister, Serhii Koretskyi, an oil and gas man that cut his teeth as an oil trader in the private sector before going to run Ukraine’s two biggest energy companies: Ukrnafta and Naftogaz.

This is very good news. He is not a Zelenskiy loyalist and doesn’t really have any political affiliations or ambitions. As a well-off businessman, he also has no reputation for corruption and is basically what it says on the can: a highly professional and competent manager from the most important sector in the economy - just what Ukraine needs.

Two political take outs from his appointment:

-- It strongly suggests that Zelenskiy is getting ready for a heavy bombardment this winter, which is pretty obvious, and energy is the key to the war now; and

-- Zelenskiy has moved beyond the regular politics of most of his administration where he hired his friends from Kvatal95 to look for professional managers who can get things done.

The bad news is that Zelenskiy succumbed to the military lobby pressure and fired the highly competent and popular Defence Minister Mykhailo Fedorov. As we detailed in our profile, Fedorov is credited with many successes which he cheekily detailed in his parting tweet, rubbing Zelenskiy nose in it with a very impressive list:

 

“It has been a great honour to serve the Ukrainian people as the Minister of Defence.

Here is what our team managed to achieve: 1. Disabled Starlink access for Russian forces.

2. Took over a Ministry of Defence with zero budget, took a risk, reallocated funds from payroll from the end of the year, and effectively invested them in mid-strike capabilities, fiber-optic FPVs, low-cost reconnaissance, ground robotic platforms, interceptor drones, and deep-strike drones.

3. Launched "Logistical Lockdown", this cut off enemy logistics and initiated the isolation of Crimea.

4. Continued the funding program for the Drone Line.

5. Launched a support program for modern drone-assault units that rely primarily on advanced technologies in combat.

6. Introduced a 70% advance payment policy for procurements made via e-Points on the Brave1 Market portal.

7. Fundamentally overhauled the procurement system.

8. Procured thousands of pickup trucks, buggies, and ATVs for the military for the first time—and did so through open tenders.

9. The drone interception rate rose from 83% to 91%, and the cruise missile interception rate soared from 47% to 87%.

10. Contracted Patriot PAC-2 GEM-T missiles for the first time, and submitted an application through an EU loan to purchase PAC-3 missiles.

11. Launched a baseline drone supply system for brigades and corps.

12. Launched a massive grant program for manufacturers of explosives and missiles.

13. Initiated an unpopular but vital transformation of the military.

14. Conducted three UDCG meetings, where we successfully broke through the Russian information trap claiming our defeat, restoring partners' faith in Ukraine. This secured $40bn in support announced for this year (excluding the EU loan).

15. Launched the mechanism to utilize the EU loan for our military priorities.

16. Found a way to scale cheap missiles against jet-powered Shaheds and signed a record-breaking contract.

17. Our domestic ballistics. We radically revised the technical specifications, maximized accuracy, and reduced the cost by 30%.

18. Signed a contract to procure Gripen fighter jets.

19. Collabourated with the military to plan and execute Operation Auchan, which halted the enemy's mechanized offensive for six months.

20. Opened up exports under the Drone Deal program to attract investment and scale up domestic defence-industrial complex (OPK) production.

21. Launched the Trophy Lab, providing partners with the opportunity to study captured Russian military technologies.

22. Launched the Defence AI Center A1 to accelerate the integration of artificial intelligence on the battlefield.

Thank you to my entire team for their relentless 24/7 service. A special thank you to my family for their patience.”

Fedorov would have been another good choice for prime minister as he is of the same ilk as Koretskyi: a talented businessman with a lot of energy, who is also a corruption fighter in charge of the cesspool of the defence industry procurement programme. He came to Zelenskiy’s attention during his presidential bid in 2019 and was appointed Digital Minister, while still in his late 20s, where he also did a sterling job.

It appears that he was Zelenskiy top pick and it also appears that the siloviki pressured Zelenskiy into sacking him. Why? That is the big question.

The charitable answer is that Ukraine’s Commander-in-Chief Oleksandr Syrskyi, a Soviet-trained career soldier who has been clashing with Fedorov, mustered his forces to block his reappointment as part of the regular political play of rivals.

The uncharitable answer is that everyone, and I mean everyone, in the defence ministry is making a lot of money and Zelenskiy is part of that.

We won’t know. Remember, Ukrainian law bans investigations into a sitting president. This paints a different picture of Zelenskiy’s authority and just how rotten the system is.

The people clearly think that the latter explanation is the one that counts. A second anti-government demonstrations broke out this morning, following those last July when Zelenskiy rammed through Law 21414 that would have gutted the anti-graft reforms.

Now Zelenskiy has done it again: favoured the venal insiders over the interests of the country. Either he is sympathetic to the graft or he is too weak to resist it. According to Iuliia Mendel, Zelenskiy’s former press secretary, he is as venal as the others.

This episode has only added to my concerns about the depth of the corruption in the military system and the callousness of the people running it. As I have said before, the lack of working institutions in Ukraine means that corruption is the system – something confirmed to me personally by a former minister, who is also a personal friend, and very publicly quit over the corruption issue.

The Energoatom corruption scandal is well known, but the detail that has barely been reported is what the $100mn was stolen from. After Russia started targeting power stations two years ago it became very clear that one of Ukraine biggest vulnerabilities, other than the plants themselves, is the 70 ultra-high voltage 750kV substations that are the backbone of the power grid. Take those out and you blackout entire regions. It already happened last autumn in Odesa and will happen this winter too.

Volodymyr Kudrytskyi, the former head of Ukrenergo, the civil utility company, realised this and raised over $1.5bn from partners, separately from the government’s war funding efforts. He then built huge concrete defences for the substations that completely protected them from subsequent missile attacks. It is one of the most under-reported success stories of the war and Kudrytskyi is another energy professional cut from the same cloth as Koretskyi and Fedorov.

Energoatom, the nuclear utility company, was supposed to make the same investments, but… you guessed it… never invested a penny. It was all stolen by the then Energy Minister Herman Halushchenko and his mates. When Kudrytskyi publicly began to push Hlushchenko to make those investments, he was dismissed in 2024 and then, ironically, charged with corruption in late 2025 on trumped up charges. A few months later the NABU investigation into energy sector corruption broke and it was Hlushchenko that was arrested. He is now free again as luckily, he found $3.3mn to post bail at the back of his sock drawer… Kudrytskyi is also out on bail after posting $306,000 bail.

Things have moved on since then with another pragmatic Zelenskiy appointee. The current energy minister is Denys Shmyhal, formerly Ukraine’s longest serving Prime Minister, who is also cut from the same cloth as the good guys.

What emerges from all this are two kinds of chinovniki serving in Ukraine: highly competent professional managers (often associated with the energy sector); and venal old school leeches that are happy to let the country be destroyed and allow people to die, as long as they can steal millions for themselves.

Energy and defence are the epicentres of corruption, but the scale is very different. NABU has scored big with a very public investigation into the energy sector, but at the end of the day it uncovered a $100mn kickback scam. The scale of the money going into defence is two orders of magnitude larger: the first tranche of the €90bn EU loan is around €45bn of which two thirds is earmarked for defence spending. That is €30bn on the table with the same amount due next year. That is a lot of money.

Energy corruption is proven. Defence corruption is still opaque, apart from the off trivial egg-price scandal. Talking to people in Kyiv, it is on an epic scale. According to one IntelliNews interlocutor, every single drone bought by the government is vastly overpriced and the missile-maker Fire Point, owned by Zelenskiy’s friends, is one of the biggest beneficiaries. But there is scant evidence to prove this. Zelenskiy said this morning that Ukraine is now producing 10mn drones a year. Do the math.

What should worry Ukraine’s western allies – and I'm certain they are well aware of what is actually going on – is Zelenskiy’s reshuffle has brought in a competent manager as Prime Minister, and the corruption problems in the energy sector is being dealt with, but the real progress in dealing with the vastly larger corruption problem in the defence sector that Fedorov personified, has just been killed off.

As former Russian Prime Minister Viktor Chernomyrdin famously said: “We hope for the best, but things turn out like they always do.”

If Ukraine loses this war, it will not only be due to Russia’s missile advantage, but thanks to the stealing of cash that was supposed to be spent on defences and is spent on lavish lifestyles in Nice instead.

This article originally appeared in Editor’s Picks, a free daily email digest of bne IntelliNews’ best stories from the last 24 hours. Sign up for free here.

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