12:22 10.06.2013

Perchersky court approves amicable agreement between Vanco and Ukraine under PSA for Prykerchensky deposit

3 min read

Perchersky District Court in Kyiv has satisfied a petition of Vanco Prykerchenska Ltd. (the British Virgin Islands) asking that it recognize the final decision of the Arbitration Institute of the Stockholm Chamber of Commerce (Sweden), which on December 28, 2012 approved an amicable production sharing agreement (PSA) on Prykerchensky deposit of the Black Sea shelf between the company and Ukraine.

"The final decision of the Arbitration Institute of the Stockholm Chamber of Commerce (Sweden) of December 28, 2012 in case V (91/2008) between Vanco Prykerchenska Ltd and Ukraine is recognized in Ukraine," reads a ruling of Perchersky District Court in Kyiv of June 6, 2013, a copy of which has been sent to Interfax-Ukraine.

Vanco Prykerchenska President Jim Bown told Interfax-Ukraine that the company is satisfied with the decision.

"We hope that the completion of all the legal procedures soon will unblock the realization of the project for the exploration of hydrocarbons in Prykerchensky deposit of the Black Sea," he said.

As reported, Vanco Prykerchenska Ltd. has asked Pechersky District Court in Kyiv to recognize the final decision of the Arbitration Institute of the Stockholm Chamber of Commerce (Sweden), which on December 28, 2012 approved an amicable PSA on Prykerchensky deposit of the Black Sea shelf between the company and Ukraine.

Vanco International, a 100% subsidiary of Vanco Energy Company (the United States), in April 2006 was declared the winner of a tender for the rights to sign production sharing agreements (PSA), under which production will take place within the Prykerchensky oil and gas section in the Black Sea. Vanco International transferred its PSA rights and obligations in October 2007 to Vanco Prykerchenska, which was formed in August of that year.

The government of former Premier Yulia Tymoshenko in 2008 withdrew from the PSA, after which Vanco appealed to the international court of arbitration, continuing to propose that the government of Ukraine resume cooperation under the PSA. After Ukrainian President Viktor Yanukovych came to power, the government of Premier Mykola Azarov in April 2011 approved an amicable agreement with Vanco Prykerchenska, instructing that it amend the agreement on hydrocarbons distribution. The Stockholm Arbitration Court approved an amicable agreement between Ukraine and Vanco in late December 2012.

According to the PSA, Ukraine will receive about 70% of the total production on the deposit.

Earlier the owners of Vanco Prykerchenska on a parity basis were Vanco International, DTEK, Shadowlight Investments Ltd of Russian businessman Yevgeny Novitsky and Integrum Technologies Ltd.

However, on November 27, 2012, DTEK signed a sale and purchase agreement for shares of Vanco Ukraine Ltd., which will allow it to increase its stake in the company from 25.5% to over 50%. Vanco Ukraine holds 100% in Vanco Prykerchenska Ltd.

Earlier Kapital investment and financial house (Russia), which belongs to the owners of Russia's Lukoil via affiliated companies, built up a stake of over 50% in Vanco International Ltd. Earlier Vanco Energy Company (the United States) held a 100% stake in Vanco International.

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