On public statements concerning amendments to government resolution #615
On public statements concerning amendments to government resolution #615

Ukrnafta will examine the amendments to government resolution #615 as soon as the official document has been published, to understand the prospects for restoration of production at the fields where operations were halted due to non-extension of the licenses.

According to the information in the public domain concerning the amendments to resolution #615, the changes will introduce a mechanism to enable restoration of production at the fields from which local communities are supplied with gas. Ukrnafta will welcome any step enabling resumption of gas supply to the affected communities, which is what the company suggested in its open letter to the President of Ukraine in early June prior to the stoppages.

However, under the announced parameters this mechanism will not resolve the problem with the unlawful refusal to extend Ukrnafta's licenses. The company reminds that as early as 17 January 2017 the ruling of the District Administrative Court entered into force, according to which the tax debt is not a lawful ground to deny extension of the licenses. The ruling was subsequently sustained in the appeals and highest administrative courts.

Despite the ruling, the State Geological Service of Ukraine continues to avoid any action on the extension of Ukrnafta’s licenses. As a result, 6 of Ukrnafta’s licenses in Lviv and Sumy oblasts have already expired leaving circa 50 000 residents of 8 communities in the Sumy region without gas supply. Ukrnafta stands to lose 20% of annual output of oil and condensate and 16% of annual output of natural gas. The production stoppages will lead to interruption in the investment program and endanger job security of Ukrnafta’s employees.

According to Ukrnafta’s earlier reports, the State Geological Service has repeatedly acted in violation of law to return the company’s applications to extend 9 licenses expiring in 2017 citing the company's tax debt. In doing so the State Geological Service cited the provisions of paragraph 15 of the Rules for issuance of licenses (approved by government resolution #615 of 30/05/2011) which were invalidated and annulled by the court decision.

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