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The subsoil use industry may become more attractive to investors in 2021

05/ 02/ 2021
  On February 3, the Verkhovna Rada Committee on Environmental Policy and Nature Management recommended the adoption of the draft law №4344, which streamline the tender procedure for the conclusion of production sharing agreements (PSAs). The European Business Association emphasizes the importance of this document, which will help solve the main problems of weak development of domestic subsoil use, namely the lack of strategic and predictable public policy, imperfect and non-transparent regulation of the sphere, manifestations of corruption, and more. At the same time, the contribution of the extractive industry to Ukraines economy is underestimated. According to the State Statistics Service, in 2019 the share of the extractive industry and quarrying amounted to 222.3 billion hryvnias or 5.59% of Ukraine’s GDP. And this is under conditions when only a third of the explored deposits are in exploitation. In the opinion of the business, the Draft Law №4344 includes the following positive changes: terms of the PSA tender and the criteria for evaluating the proposals of tenderers are specified by the Interdepartmental Commission; the openness and publicity of selecting tender winners is ensured; the terms for environmental impact assessment are optimized; the term is extended between the publication of the PSA tender announcement and the deadline for submission tender participation applications; the use of international standards (UNFC-2009, CRIRSCO, PRMS) is enabled for the examination and assessment of mineral reserves; obtainment of the permit from the State Architectural and Construction Inspectorate of Ukraine for construction works at some facilities in the oil and gas sector, etc. is excluded. We hope that the draft law №4344 will be adopted by the Parliament soon, and the sphere of subsoil use will become even more attractive for investors!   Be the first to learn about the latest EBA news with our Telegram-channel – EBAUkraine.

On February 3, the Verkhovna Rada Committee on Environmental Policy and Nature Management recommended the adoption of the draft law №4344, which streamline the tender procedure for the conclusion of production sharing agreements (PSAs).

The European Business Association emphasizes the importance of this document, which will help solve the main problems of weak development of domestic subsoil use, namely the lack of strategic and predictable public policy, imperfect and non-transparent regulation of the sphere, manifestations of corruption, and more. At the same time, the contribution of the extractive industry to Ukraine’s economy is underestimated.

According to the State Statistics Service, in 2019 the share of the extractive industry and quarrying amounted to 222.3 billion hryvnias or 5.59% of Ukraine’s GDP. And this is under conditions when only a third of the explored deposits are in exploitation.

In the opinion of the business, the Draft Law №4344 includes the following positive changes:

  • terms of the PSA tender and the criteria for evaluating the proposals of tenderers are specified by the Interdepartmental Commission;
  • the openness and publicity of selecting tender winners is ensured;
  • the terms for environmental impact assessment are optimized;
  • the term is extended between the publication of the PSA tender announcement and the deadline for submission tender participation applications;
  • the use of international standards (UNFC-2009, CRIRSCO, PRMS) is enabled for the examination and assessment of mineral reserves;

obtainment of the permit from the State Architectural and Construction Inspectorate of Ukraine for construction works at some facilities in the oil and gas sector, etc. is excluded.

We hope that the draft law №4344 will be adopted by the Parliament soon, and the sphere of subsoil use will become even more attractive for investors!

 

Be the first to learn about the latest EBA news with our Telegram-channel EBAUkraine.

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