The Asset Recovery and Management Agency (ARMA) and Public Joint Stock Company "Ukrnafta" call on the National Security and Defense Council of Ukraine (NSDC) to resolve the issue of the use of a special permit by PrJSC "MC "Ukrnaftoburinnya" for the period of martial law to ensure revenues to the state budget.

During the agency's public report for 2023, Olena Duma, Head of the ARMA, called on members of the Parliament to introduce a draft law that would regulate the possibility of using a special permit for the use of subsoil and hydrocarbon production at the Sakhalin field in Kharkiv region as one of national importance and prevent the termination of billions of dollars in revenues to the state budget of Ukraine.

The relevant draft law was registered in the Verkhovna Rada of Ukraine on April 1, 2024 under No. 11137.  

Therefore, on April 1, 2024, ARMA and PJSC "Ukrnafta" addressed a joint statement to the National Security and Defense Council of Ukraine to ensure uninterrupted hydrocarbon production, gas supply to the population, and stable revenues under the management agreement. 

The statement to the National Security and Defense Council of Ukraine contains substantiated proposals of the National Agency and PJSC "Ukrnafta", in particular, to decide on the appeal to the Verkhovna Rada of Ukraine to support the draft law on amendments to the Subsoil Code of Ukraine regarding the possibility of granting a special permit during the period of martial law without holding an auction by the resolution of the NSDC on the basis of an asset management agreement concluded with the ARMA.

As a reminder, PrJSC "MC "Ukrnaftoburinnya" held a special permit for subsoil use and hydrocarbon production at the Sakhalin field in Kharkiv region. Unfortunately, the resolution of the Sixth Administrative Court of Appeal revoked the special permit, which jeopardized the national interests and energy security of the state. At the same time, the Supreme Court, in its resolution dated December 12, 2023, dismissed the cassation appeal of ARMA and also dismissed the cassation appeal of PrJSC "MC "Ukrnaftoburinnya".

The forecasted net profit of PrJSC "MC "Ukrnaftoburinnya" for 2024, which is the source of the state's revenues from asset management, based on the average performance indicators of the Company for 11 months of 2023, amounted to UAH 6.5 billion.

Losses of local and state budgets of Ukraine from the shortfall in revenues due to the suspension of the production activities of PrJSC "Ukrnaftoburinnya" (excluding personal income tax, unified social tax and military duty) amount to UAH 410.455 million per month.

In addition, the suspension of production at the Sakhalin field may result in the citizens of Kharkiv region being left without gas supply in the event of a full-scale war. 

In view of this, PJSC "Ukrnafta", ARMA and PrJSC "MC "Ukrnaftoburinnya" called on the members of the Ukrainian Parliament to legislate to allow issuing special permits during the period of martial law without holding an auction in accordance with the resolution of the National Security and Defense Council of Ukraine on the basis of an asset management agreement concluded with the National Agency.

We emphasize that all state authorities should join forces to ensure budget revenues and uninterrupted operation of such fields.

We hope that the statement on the protection of national interests and security of the state and the already registered draft law shall receive a positive response from the National Security and Defense Council of Ukraine, the President of Ukraine and the Verkhovna Rada of Ukraine.