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Ukraine ‘ready’ to accelerate deregulation and transparency of oil and gas industry, Ministers says

Ukraine’s Ministry of Energy is “ready” to accelerate deregulation and increase the transparency of the oil and gas and critical raw materials sectors to attract investments, said Ukrainian Deputy Energy Ministers, Farid Safarov and Mykola Kolisnyk during an international conference on Friday (12 May).

Mr Safarov noted that since the start of Russia’s full-scale invasion, the Ukrainian government has taken a number of steps to support gas production enterprises and reduce the country’s dependence on imported natural gas to prevent the stagnation of the country’s oil and gas industry.

In particular, the government implemented a new policy that introduced a separate rent payment for using subsoil and extended guarantees against changing or cancelling payments until 2032. Furthermore, the new policy resolved the issue of determining the tax base for natural gas produced in Ukraine from 1 August 2022. This was achieved by establishing a mechanism to determine a verified sale price of gas sold by rent payers for subsoil use.

Mr Safarov also emphasised the importance of adopting a new legal framework to facilitate the acceleration of subsoil use, openness for subsoil users and investors and partial simplification of obtaining permits.

“Ukraine has significant potential for the development of the oil and gas industry. We call on our partners to participate in the reconstruction of Ukraine, which will allow not only to increase our energy independence but also the pan-European energy security and for investors to develop their businesses in cooperation with Ukrainian state and private companies,” Deputy Minister Safarov said.

Deputy Minister of Energy Kolisnyk recalled a Memorandum signed with the EU on a strategic partnership regarding critical raw materials, signed with the EU in July 2021. He noted that Ukraine’s Cabinet of Ministers approved a list of subsoil areas that are of strategic importance for the sustainable development and defence capability of the State, which will be made available for use via tenders for the conclusion of production sharing agreements.

“We are interested in investment projects in this area to establish a cycle that will include mining and production of the final product in Ukraine. To achieve these goals, the Government is ready to use all tools to build the appropriate vertical,” Mr Kolisnyk said. The Deputy Minister added that Ukraine has concentrated deposits of critical minerals including lithium, rare earth elements and titanium.

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