Ukraine completes tenders for nine gas-bearing fields

The Ukrainian government has announced the result of
tenders held for product sharing agreements (PSA) aimed at the exploration of
nine potential oil and gas fields, the Energy Ministry reported on July 1. The
ministry received 23 bids from 14 companies, of which seven companies/partners
were selected, including Ukrainian, U.S. and Canadian companies.

Of the nine fields, two were awarded to
state-controlled UGV, Ukraine’s biggest gas producer; two were awarded to UGV
in partnership with Canadian Vermilion Energy (VET CN); one was awarded to
U.S.-based Aspect Energy; and the rest to local private companies: DTEK Oil
& Gas (Rinat Akhmetov), GeoAlliance (Victor Pinchuk), Ukrnaftoburinnia
(Ihor Kolomoisky), and Zakhidnadraservis (Zinovy Kozytsky). The winners have
committed to invest over USD 450 mln into the exploration of fields and
drilling of at least 39 exploration wells in the next five years. The state’s
share at the profit-production stage will reach 12%-35%, depending on the
field.

Alexander Paraschiy: This was the first transparent tender for PSAs, which clearly adds to
Ukraine’s investment attractiveness, especially taking into account that
international companies were awarded some fields. This is a small, but probably
important step towards a potential boost in natural gas production in Ukraine.
The government is planning to offer some more fields for PSAs in continental
Ukraine and its offshore zone in the near future.