Yesterday, parliament approved changes to the law “On Production Sharing Agreements” in the first reading. The changes are supposed to improve the legislative environment for the parties involved in joint oil & gas projects in Ukraine. Vladimir Nesterenko: It is pretty obvious that the changes to the law are the product of a working group formed last year in an attempt to finalize the deal between the Ukrainian government and Vanco International. The latter won a deepwater drilling contract for the Prykerchenska bloc in 2006. At first glance, the changes are generally concentrated on making (1) a law “On PSAs” and (2) the conditions of PSAs to override other laws and rulings currently regulating the domestic oil & gas industry. However, in our view, the document voted on by Rada is quite crude and still requires thorough expertise to avoid contradictions with existing legislation.