Businesses urging govt to abandon reorganization of State Service of Geology and Subsoil Resources due to risks to investment climate and budget

Member companies of the European Business Association are concerned about potential plans to reorganise the State Service of Geology and Subsoil Resources of Ukraine. According to business information, the Ministry of Economy, Environment and Agriculture is considering a decision to establish a State Agency for Natural Resources Management, transferring to it the powers of the current service, EBA has reported.

As the association notes, representatives of subsoil users believe that transferring the powers of the current service to a new body could negatively impact the stability of the extractive industry and lead to the suspension of the issuance and renewal of special permits for subsoil use.

The association notes that changing the institutional model during a war threatens the implementation of international investment agreements, particularly those under the U.S.-Ukraine Investment Recovery Fund. The reorganization also creates uncertainty regarding the implementation of production-sharing agreements and could paralyze related geological services, such as the approval of mineral reserves and access to geological information.

Businesses estimate that the transition period for the transfer of functions, assets, and budgetary obligations could last from six months to three years, which will be accompanied by the risk of losing qualified personnel.

The EBA places particular emphasis on the economic aspects of the agency’s activities, noting that the state budget received approximately UAH 1.8 billion from auctions in 2025 alone. A temporary suspension of the regulator’s operations will lead to a loss of these revenues, delays in ongoing investment projects, and a decline in confidence among international partners. Furthermore, there is a risk of slowing the development of Ukraine’s mineral resource base and the state accounting of deposits.

Given these factors, the association calls on the Cabinet of Ministers of Ukraine not to initiate a reorganization of the State Geological Survey without broad consultation with the market. Instead of creating new structures, the business community proposes focusing on strengthening the capacity of the current body to ensure stable public administration in the extractive sector.