12:15 15.04.2020

Gas producers association calls on govt to support gas industry

2 min read
Gas producers association calls on govt to support gas industry

The Association of Gas Producers of Ukraine calls on the government to take a number of measures to support the industry during the global economic crisis caused by the coronavirus disease (COVID-19) spread.

The association said in a statement released on its Facebook page that there are a record decline in global oil and gas prices, including in the oil and gas industry of Ukraine, what creates, in particular, a high risk of decline in investments into oil and gas production, that in the future may cause its significant decrease.

In view of this threat, the association appealed to the president of Ukraine, the parliament and the government with number of proposals aimed at supporting the industry. The association considers it necessary to introduce incentive royalties of 6% and 12% (for wells over five kilometers deep and up to five kilometers deep respectively) for rehabilitated wells where gas and oil have not been mined for the last two years and which have been returned into the production process after workover.

By analogy with the incentive regime of taxation for natural gas production, the association requested to reduce the royalties for oil and gas condensate production to 6% and 12% for new and rehabilitated wells.

The association said about the need to develop a transparent methodology for identifying difficult and nonconventional oil and gas deposits, as well as introduce incentive standards for their mining.

The association also considers it advisable to extend the period of taxation of oil and gas production from new wells from five to ten years, as the government guaranteed.

The statement also contains the need for the appointment of the Head of the Ministry of Energy and Environmental Protection as soon as possible, what is essential for a constructive dialogue on the implementation the package of industry support measures.

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