Fuel and Energy

13/ 07/ 2011

The Resolutions of the Cabinet of Ministers of Ukraine (Resolution on Approving Procedure for Holding Auctions on Purchase of Special Permits for Subsoil Use No. 594 and Resolution on Approving Procedure for Granting Special Permits for Subsoil Use No. 615) are aimed at regulating the procedures for respective licensing on the territory of Ukraine, its continental shelf and sea economic zone, i.e. the procedure for holding auctions on subsoil permits purchase, prolongation of permits, their renewal, issue of their duplicates, suspension and annulment of permits, etc.

Both Resolutions are aimed at regulating legal relations for the long-term period (compared to one-year operation period prescribed by the previous versions of respective Resolutions), which is considered to be a positive novelty. This very proposal has always been stressed by the EBA as we believe that the Government should encourage long-term investments to subsoil use and provide the investors’ functioning within stable legislative and regulatory framework. The EBA pointed out this proposal in its report “Overcoming Obstacles to Business Success” (dated June 2009), in EBA appeals to the respective drafts when they were elaborated by the Ministry of Ecology and Natural Resources of Ukraine (March-April 2010), and during the meetings of the EBA Fuel and Energy Committee in Brussels with representatives of the European Commission and the European Parliament (May 2011).

At the same time there is still room for improving both Resolutions. In particular, certain aspects, namely the allowing the issuance of permits without holding of auctions, extension of a permit for geological exploration, regulation of joint activities, etc. should be updated. With this regard the Association will continue cooperating with respective state authorities on refining the clauses of newly-adopted Resolutions.

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