19:53 01.04.2024

ARMA, Ukrnafta call on NSDC to help unblock hydrocarbon production at Sakhalin field

2 min read

The Asset Recovery and Management Agency (ARMA) and PJSC Ukrnafta submitted a general statement to the National Security and Defense Council (NSDC) of Ukraine (NSDC) with a request to resolve the issue of using PJSC Ukrnaftoburinnia a special permit for hydrocarbon production at Sakhalin field period of martial law regime.

"Chairperson of ARMA Olena Duma, during the agency's public report for 2023, appealed to MPs to introduce a bill that would regulate the possibility of using a special permit for the use of subsoil and the production of hydrocarbons at Sakhalin field in Kharkiv region as having national significance, and to prevent the cessation of billions revenues to the national budget," the company said in a press release on Monday.

As Ukrnafta noted, relevant bill No. 11137 was registered in the Verkhovna Rada of Ukraine on April 1, 2024.

"Therefore, on April 1, ARMA and Ukrnafta, in order to ensure uninterrupted production of hydrocarbons, gas supplies to the population, as well as stable revenues in accordance with the management agreement, submitted a joint statement to the National Security and Defense Council," the company said.

The statement to the NSDC contains reasoned proposals from ARMA and Ukrnafta to MPs with a request to legislatively allow the issuance of a special permit during the martial law regime without holding an auction in accordance with the decision of the National Security and Defense Council on the basis of an asset management agreement concluded with the National Agency.

As reported, the Sixth Administrative Court of Appeal on November 28, 2023, cancelled the order of the State Service of Geology and Mineral Resources and annulled the special permit No. 6349 dated July 10, 2019, in accordance with which Ukrnaftoburinnia carried out production at Sakhalin field. The company stopped operation of the field on December 1, 2023. At the same time, the Supreme Court, by its ruling dated December 12, 2023, refused to proceed with ARMA's cassation appeal, and also denied Ukrnaftoburinnia's cassation appeal.

From stopping natural gas production at Sakhalin field, the state monthly loses UAH 190 million in rent, UAH 130 million in VAT and about UAH 80 million in income tax.