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WINNERS OF PUBLIC TENDERS FOR PRODUCTION
SHARING AGREEMENTS (PSA's) ANNOUNCED
Seven companies announced as winners
for oil and gas blocks in Ukraine
U.S.-Ukraine Business Council (USUBC)
Washington, D.C., Fri, July 5, 2019
WASHINGTON, D.C. - On July 1, 2019, the results of the of the public tenders for Production Sharing Agreements (PSA's) for oil and gas blocks were announced in Kyiv, Ukraine, by the PSA Interagency Commission, under the Ministry of Energy and Coal Production of Ukraine. Seven companies were selected as the winners.
UGV (UkrHazVydovuvannya), a 100% subsidiary of JSC Naftogaz of Ukraine, owned 100% by the government of Ukraine, was selected for two blocks (Buzivska, Betestianska). UGV also won two additional blocks together with Vermilion Energy, Calgary, Canada (Balakliyska, Ivankivska). American Aspect Energy/SigmaBleyzer (Denver, Colorado & Houston, Texas, won the tender on the Varvinska block. Four Ukrainian producers Geo Alliance, Kyiv, Ukraine, UNB (UkrNaftoBurinnya), Kyiv, Ukraine; DTEK (Kyiv, Ukraine), and ZakhidNadraServis (Lviv, Ukraine) won the bids on Sophiivska, Rusanivska, Zinkivska, and Ugnivska blocks.
The U.S.-Ukraine Business Council (USUBC), www.USUBC.org, is very pleased with the process used for the tenders and with the completion of this important stage. USUBC believes this is a major step forward for Ukraine in attracting international direct investments, increasing domestic production, and moving towards energy independence.
USUBC views the scoring mechanism employed and the consensus building process used by the PSA Interagency Commission as being consistent with international standards and congratulates Ukraine, members of the Interagency Commission and the group of experts providing support to the Commission with a job well done.
CABINET OF MINISTERS ---
The Cabinet of Ministers now needs to approve the selection of the winners announced by the PSA Interagency Commission. USUBC hopes this will be accomplished very soon so the process of preparing the actual PSA contracts can begin. The government of Ukraine needs to review, negotiate (if needed), and approve each contract. Ukrainian law provides up to one year for this process but USUBC encourages the government will act quickly and have the contract process completed before the end of the year.
Most companies will need up to a year to finish all the 3D seismic work and start drilling exploration wells. The actual production of oil and gas will probably not start until late 2020 or early 2021. It is very important that the government of Ukraine move forward rapidly to sign actual PSA contracts with the investors so additional oil and gas will be available in the near future to support Ukraine's drive towards energy independence.