Ukraine’s gas producers on March 5 welcomed the approval by the country’s government of a new economic strategy to 2030, which includes improved terms for the upstream gas sector designed to achieve gas self-sufficiency.
Ukraine, whose gas production has been steady at some 20 Bcm/year for the past 25 years, has vast untapped potential in its onshore blocks — both for conventional and unconventional resources — as well as in the Black Sea.
But work to develop new gas fields has been slow in recent years, with upstream companies calling on the government to make the investment climate more attractive.
As part of the newly adopted economic strategy, Kyiv has outlined a number of steps it plans to take to boost gas production, including a more beneficial tax regime, an improved production sharing agreement mechanism, and tools to attract new investors to Ukraine’s upstream.
In a statement March 5, the Association of Gas Producers of Ukraine (AGPU) said it fully supported the government’s strategic goal to increase gas production in the country and achieve energy independence.
“It is extremely important to quickly implement all the steps laid out in the strategy,” AGPU executive director Artem Petrenko said.
“Joint and coordinated actions of government and business, and stability and predictability in the sector will help to achieve the strategic goal,” he said.
AGPU has repeatedly called on the government to extend the state-guaranteed period of fixed taxation on production from new wells and for financial incentives to promote unconventional gas production.
It has also called for a comprehensive revision of tax on production to bring it into line with the European average.
These measures are included in the strategy along with a number of other steps designed to bolster domestic gas output, including the introduction of public-private partnership incentives for the development of new exploration and production technology.
New investment
Ukrainian Prime Minister Denys Shmyhal said March 4 the government had already begun the process of reforming the sector, including signing a handful of new PSAs at the turn of the year…
