15:59 28.11.2017

Gas producers hope Verkhovna Rada to pass bill deregulating issue of permits in Dec

Gas producers hope Verkhovna Rada to pass bill deregulating issue of permits in Dec

Gas producers in Ukraine have expressed hope that the Verkhovna Rada early December would pass bill No. 3096-d relaxing the issue of permits. The document would allow accelerating and boosting fossil fuel production for achieving the country's energy independence declared by authorities.

Executive Director of the Association of Gas Producers of Ukraine Roman Opimakh said at a press conference at Interfax-Ukraine on Tuesday that the bill envisages the reduction of the terms for the issue of permits by 18 months, which would considerably speed up the launch of fields for commercial development and relax the allocation of land parcels for drilling new wells.

"The necessity of revising and relaxing the procedures has become imminent. Ukraine can produce more gas and more quickly, but, unfortunately, there are some regulatory obstacles," Ukrgazvydobuvannia Head Oleh Prokhorenko said, adding that the term for collecting permits to receive a deposit use license is around three years, and some of the permits overlap.

Prokhorenko said that due to difficulties with permits the idle period for drilling equipment of Ukrgazvydobuvannia only in the first nine months of 2017 was over 20,000 hours. The company could have drilled six wells over this period and extract 131 million cubic meters (mcm) of gas. Shortfall in revenues is UAH 637 million and shortfall for the budget from receiving royalties is UAH 185 million. The cost of 131 mcm of gas that the country had to import is around UAH 1 billion.

DTEK Naftogaz CEO Ihor Schurov said that if bill No. 3096-d is passed, gas producers would be able to cut the period for launching fields to several months. The period for passing all the permits is larger than time for drilling of a well.

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