On 27 June 2017, Ukrnafta will be forced to stop production at Anastasievske, Rybalske, Artyukhivske and Korzhivske fields in Sumy oblast, following unlawful refusal by the State Geological Service to extend the relevant licenses. The company produces 740 tons of oil and condensate a day and 803,000 m3 of gas a day at these four fields. Currently, the company is preparing to stop operations and begin shutting-in the wells.
Besides, as soon as tomorrow the villages of Mali Bubny, Batsman, Grishino and Loknya of Romny raion in Sumy oblast will be left without gas supply following shut-in of the Artyukhivka gas distribution station. In early June 4 other villages in the Sumy region were left without gas after the shut-in of Pivdenno-Panasivkse field. According to the Sumy oblast state administration, stoppage of production at 5 fields of Ukrnafta will interrupt gas supply to 8 local communities in the Sumy region where over 50,000 people reside. This will also have serious negative impact on Ukranfta’s operational and financial performance, job security, as well as revenues for the national and local budgets.
On June 22, the Cabinet of ministers of Ukraine published an update on its e-portal concerning amendments to Resolution of the CMU #615 regulating the procedure for issuance of licenses. The management of Ukrnafta hopes that the said amendments will bring the resolution in line with the law and court decisions and open the way for Ukrnafta to have all of its licenses extended. Nevertheless, it is already evident that this decision will not allow avoiding the stoppage of production. Moreover, it may take several weeks to obtain the licenses and other permits and the company will not be able to produce during this time.
Ukrnafta reported earlier that it had submitted to the State Geological Service in time and in full the documents to extend the 9 licenses expiring in 2017. The officials of the regulator had repeatedly refused to extend the licenses citing that the company had the tax debt even after the court found unlawful and annulled the relevant provisions of paragraph 15 of the procedure for issuance of licenses.
Pursuant to the ruling of the District Administrative Court of Ukraine, which was sustained in the court of appeals and entered in force on 17 January 2017, the existence of the tax debt is not a lawful reason to deny the extension of licenses.
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