Authorities signal Vanco may stay on Prykerchenska project

n its press release, Vanco said it believes consultations with Interagency Committee for the Settlement of Investment Disputes, lead by the Head of Ukraine’s Security and Defense Council Raisa Bohatyryova, have been positive. The company expects local authorities to soon approve a budget for the development of the Prykerchenska oil & gas field. The company also said it is ready to invest USD ~250 mln on development of the Prykerchenska oil & gas field by 2010. On May 21 the Vice Prime Minister of Ukraine Alexander Turchinov said the Cabinet decided to revoke the Production Sharing Agreement (PSA) with Vanco for the development of the Prykerchenska field on the Black Sea shelf, on the grounds that it was “a corrupt deal”. Vladimir Nesterenko: It looks like the President, who seemed to back Vanco before, has stepped in to support the company once again. We believe there is not enough time for Prime Minister Yulia Tymoshenko to shut the door on Vanco before she herself bows out of the government. Despite of the possibility that the deal might have been not perfectly clean, it was the first PSA in Ukraine and the case with Vanco will be a benchmark for the rest of investment community.