The State Service of Geology & Mineral Resources of Ukraine has officially notified PJSC Ukrnafta that starting from the 1st of September 2016, it would suspend three of the company’s special licenses for subsoil use at Kharkivtsivske, Glynsko-Rozbyshivske and Rudivsko-Chervonozavodske production fields in the Poltava region. The majority of the reasons used as a basis for these suspensions are related to the ongoing historical rent-tax liabilities.

Suspension of the company’s operations at the above-mentioned oil fields will have serious consequences for Ukrnafta and state, as the company will annually lose 31,1 ktonnes of oil and 502 mln m3 of natural gas. Thus, the state will significantly shortfall in payments of current tax. Should the parties fail to reach consensus, Ukrnafta will use its right to prottect its interests in court.  

Mark Rollins, Chairman of the Executive Board of Ukrnafta:

“Licenses suspension won’t help the state to reach its desired goal of having the tax debt repaid. On the contrary, it will significantly decrease Ukrnafta’s cash flow and make it harder for the company to pay its debt. The only solution to that is initiating an out-of-court sanation process, which will allow us to repay the accumulated debts and maintain operational efficiency. We hope that the upcoming General Meeting of Ukrnafta’s shareholders scheduled for September 15 will give an official start to this process.”

As it was previously reported, Ukrnafta’s management has offered an effective method for repaying its debts by initiating an out-of-court sanation, which envisages a clear plan of repaying the company’s debts to all of its creditors.

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