On 28 March, Kyiv District Administrative Court sustained the motion of Ukrnafta PJSC to secure its administrative claim and suspended the action of order No. 16 of the State Service of Geology and Mineral Resources on withdrawal of special permits for oil and gas production at Golubivske, Yurivske and Lopushnianske fields. The court suspended the order until the case consideration on the merits, taking into account the negative consequences of stoppage of operations at the fields. Hydrocarbon production will be resumed at these fields in the soonest possible time.  Such efficient operations of the company facilitate repayment of the existing indebtedness while suspension of special permits for subsoil use leads to discontinuance of payment of currents tax liabilities, discontinuance of gas supply for the population needs, personnel reductions and emergence of environmental risks. To prevent the mentioned negative consequences, Ukrnafta PJSC exercised its lawful right to defend its interests in court.

 

In turn, the Executive Board of Ukrnafta PJSC continues taking active steps to engage with representatives of the Government, fiscal service and Derzhgeonadra into a constructive dialogue. The company admits it has liabilities to the state on royalty payments and therefore it is doing its best to insure prompt repayment of its tax liabilities. In particular, the company proposed that the State Fiscal Service uses 2 billion cubic meters of natural gas as a tax lien, the property rights to which were confirmed by the ruling of the Supreme Economic Court. Besides, the company proposed adjusting the royalty rate for oil production, having linked it to the current oil price. Additionally, on March 16, the company’s Chairman of the Executive Board proposed initiation of an out-of-court recovery process to improve financial position of the company that would enable it to pay off all of its debts eventually: to the State Fiscal Service as well as to its minority shareholders.

 

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