Cabinet suggests increased royalties for gas production by private firms in 2015

13:01, 23.12.2014 1 min read

Ukraine's Cabinet of Ministers has suggested that lawmakers introduce increased royalties for gas production by private firms in 2015, fixed at 55% and 20%, depending on the depth of gas wells.

This initiative is stipulated in draft amendments to the Tax Code tabled in parliament.

Under the agreement, royalties rent is to be fixed at 70% if the parties operate under a joint agreement.

At the same time, the government has proposed that a bill on the review of the taxation system in the oil and gas production should be drafted and tabled in parliament until July 1, 2015.

As was reported, royalties on gas production by private firms were set until July 2014 at 28% of the value of produced gas if well depth is not deeper than 5 km, and at 15% for wells that are deeper than 5 km.

Then lawmakers temporarily, until the end of 2014, raised the rates to 55% and 28% respectively. This measure was severely criticized by private oil and gas producers, who responded by phasing out their investment programs.