Source: Government of Ukraine
The signing of oil and gas distribution agreements will demonstrate to international investors that Ukraine is attractive for investment and that the Government is fulfilling its commitments. This was stated by Prime Minister Denys Shmyhal.
On December 31, with the participation of the Head of Government, production sharing agreements were inked regarding 7 sites: Sofiyivska, Uhnivska, Balakliyska, Ivanivska, Zinkivska, Buzivska, Berestyanska. Competitions for concluding relevant agreements took place in 2019.
“For the first time, the Government is signing agreements on the distribution of products on seven gas-bearing zones with the winners of open and transparent auctions. This is an extremely successful case, which will provide an opportunity to attract at least UAH 12 billion in gas production,” Denys Shmyhal stressed.
The Prime Minister accentuated that the signing of production sharing agreements is a vital step towards ensuring energy independence and energy self-sufficiency, as the development of these fields will help significantly increase gas production.
“Apart from investments, the state will receive hundreds of new high-paying jobs, a significant share of the extracted resource and significant tax revenues,” the head of government said.
According to the concluded agreements on the distribution of products, Ukraine for a certain period of time transfers the right to a private investor to conduct search, exploration and extraction of minerals in a particular area. The investor, for his part, undertakes to perform the assigned work at his own expense, followed by reimbursement of costs and payment in the form of part of the profitable products.