Slovakia's Nafta, a leading oil and gas company in the country with storage facilities of 2.74 billion cubic meters (bcm) of natural gas exploring fossil fuel fields on the Slovak-Ukrainian border, has said that the company wants to become a participant, investor and operator of the product sharing agreement (PSA) for the Yuzivske gas field (Kharkiv and Donetsk regions).

"Nafta is ready to become a participant in Yuzgaz as soon as the Cabinet of Ministers approves the assignment of rights and obligations from Nadra Yuzivska LLC to Yuzgaz and become the operator," Deputy Director of the exploration and production department of Nafta and CEO of CNG LLC (Vovkove,Uzhgorod district) Martin Slovak said at a meeting of the interagency commission for PSA at the end of last week in Kyiv.

Slovak said that the previous week Nafta Board Chairman, the key owner of Czech energy group EPH (Energeticky a prumyslovy holding), Daniel Kretinsky met with Ukrainian Prime Minister of Ukraine Volodymyr Groysman.

Nafta wants to become an additional investor in Yuzgaz B.V. and the operator, which will implement the project, Slovak said.

He said that the company is ready to take liabilities that previously Shell company took. Shell decided to leave the project later.

"We plan to carry out all the works that Shell wanted to do in the first five years, but more effectively," he said.

He said that some economic and financial conditions require revision, in particular, over the decline in the prices of hydrocarbons in the period after 2012-2013, or the project would be loss-making.

Slovak said that Nafta hired leading consultants and lawyers in Ukraine and the company is ready to invest in the near future.

He recalled that in summer 2016, Nafta acquired 50% in the Yuzhgorod gas field from U.S. Cub Energy Inc. and has invested EUR 100 million in exploration works and conducted the seismic tests.

The co-founder of Yuzgaz from Canada Jaroslav Kinach, who once headed Ukraine Country office of the European Bank for Reconstruction and Development (EBRD), said that the second beneficiary via Emerstone Energy and Emerstone Capital Partners is his Canadian friend.

He said that the ultimate beneficiaries held talks with strategic investors in the past several months. The company arrived with its own strategic investor and wants to start negotiations with the Ukrainian commission, he said.

As reported, in July 2016 Yuzgaz won the tender to attract investors for the implementation of the PSA for production of hydrocarbons within Yuzivska deposit, but the Cabinet of Ministers on November 2 of the same year refused the company participation in the PSA.

Yuzgaz successfully contested the cabinet resolution in court.