Elections Loom over Ukraine's Upstream: Consultant
Ukraine is holding a series of licensing rounds this year to increase gas production, but investors fear they might still run into regulatory and fiscal changes following the March 31 presidential elections, according to a report by GlobalData published March 20.
The report analyses Ukraine's 2019 three online concession tenders and production-sharing agreements tender, which comprises 42 onshore blocks covering 20,000 km². The first online concession tender was concluded on March 6 with the assignment of three blocks to US Burisma, domestic DTEK, state Naftogaz and Ukrgazdobycha.
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GlobalData said: "As a result of low natural gas royalty rates, fixed at 12% and 6% for new gas wells at reservoir depth of less than and more than 5,000 metres respectively, Ukraine's gas fiscal framework is competitive at a regional level. However, no international oil company is among the winners of the first concession tender at a time when Ukraine needs capital and technology to develop its hydrocarbons sector."
According to Ukrainian officials holding an upstream presentation in London January 31, all three presidential candidates stress the importance of more oil and gas production.
UK-listed Regal Petroleum said March 19 that a Ukrainian court had found in its favour, in a dispute with the state geological service, which had threatened to suspend a licence for a producing gas field without giving a reason. Pending investigation, Regal can resume normal operations, it said.