Ukraine's State Service for Geology and Deposits has urged public joint-stock company Ukrnafta to pay a debt of UAH 12.5 billion for deposit use to the national budget.

"As of April 1, 2017 the company has a debt for almost all permits under which the company is extracting fossil fuel… Despite the fact that Ukrnafta is a large deposit user, the obligation to pay royalties is mandatory, not selective," the authority said.

As reported, in early April Ukrnafta suspended extraction at Zavodivske field (Lviv region), as the State Service for Geology and Deposits decided not to extend the license for this field.

In 2017, nine licenses of Ukrnafta would expire. The company produces around 20% of oil a year using these licenses.

The authority refuses to extend the license, as the company has a tax debt.

Ukrnafta believes that the authority ignores a court ruling, according to which the tax debt is not a legal ground for refusal to issue or extend licenses. The company believes that this is unlawful, and Ukrnafta filed a lawsuit to court.