Ukraine announces PSA tenders for 12 oil and gas fields

Transcription

1 Ukrae announces PSA tenders for 12 oil gas fields 20

2 Ukrae announces PSA tenders for 12 oil gas fields On 5 January 20 entered to force Resolutions passed by Cabet of Misters of Ukrae on 18 December 2018 ( 'Resolutions') approvg tenders for execution of production sharg agreements ( 'PSAs') with State of Ukrae for 12 oil gas blocks. Sce this is first time sce 2012 that new oil gas blocks are beg offered to vestors under PSAs, se resolutions represent a significant development for Ukraian oil gas. Below we capture ma features of PSA tenders envisaged by Resolutions. Conditions of PSA tenders The ma conditions of PSA tenders for 12 oil gas blocks are as follows: Eligible bidders: Ukraian foreign legal entities, dividuals or consortiums. Meral resources that can be explored extracted: Natural gas, shale gas, tight gas, coal-bed gas (methane), gas condensate oil with 10,000 meters below surface. Participation fee: UAH 300,000 (approximately USD 10,700) for each of PSA tenders. The participation fee will be returned only if PSA tender has been cancelled (for reason of not even a sgle bidder applyg for tender or havg bidder apply, but not meetg tender requirements). Criteria for choosg wner: The Resolutions establish followg criteria for choosg wner of PSA tender: focus of work program towards complex usage of oil gas block early production; rational usage of natural resources under work program; level (percentage) of state share at profit-production stage; amount of vestment; effectiveness of environment protection measures; level of fancial support for work program; experience oil gas exploration production ( particular, from unconventional sources); level of local content (use of goods services of Ukraian orig). 2 Hlg a regulatory crisis 3

3 Oil gas blocks: The blocks nomated for separate PSA tenders clude: PSA tenders timele No. Oil gas block Region Area 1 Varvska Poltava/Chernihiv 3, Rusanivska Sumy/Poltava Grunivska Sumy/Poltava Ohtirska Sumy/Poltava/Kharkiv Buzivska Kharkiv/Dnipro Zkivska Sumy/Polava Ivanivska Kharkiv Ichnyanska Chernihiv 2, Balaklijska Kharkiv Sofiyivska Chernihiv/Sumy/Poltava 2, Berestyanska Lviv/Kharkiv Ugnivska Lviv/Ivano-Frankivsk Mimum vestment requirements established by Resolutions UAH 850,000,000 (approximately USD 30,335,000) UAH 500,000,000 (approximately USD 17,845,000) UAH 450,000,000 (approximately USD 16,060,000) PSA tenders are expected to be announced February or begng of March, at which time bidders will have three months to submit ir applications. The PSA tenders will be performed under followg procedure accordance with Resolutions of Ukrae No XIV On PSAs dated 14 September 99: <2 months 3 months Day X ( date when CMU resolution approvg decision on holdg PSA tender comes to force effect) Stage 1 Stage 2 The Cabet of Misters of Ukrae ( 'CMU') takes a desision on holdg of PSA tender approves essential terms of tender Interagency Commission prepares detailed tender terms publishes official tender announcement Period for submission of applications to participate PSA tender Evaluation of applications issuance of recommendations on PSA tender wner by Interagency Commission to CMU <1 month Production sharg prciples: The vestor s share cannot exceed 70% at cost-recovery stage. At profit-production stage, state s share cannot be lower than 11%. Requirements for work program: The followg is required from vestor s work program: preparation of environmental impact assessment; performance of followg works with geological exploration stage ( first five years): (a) geological exploration; (b) drillg of no less than two exploration wells (three wells case of Varvska, Ichnyanska, Sofiyivska Ugnivska oil gas blocks); (c) performance of 3D seismic survey works on all of blocks (but for no less than 500 square kilometres case of Varvska, Ichnyanska Sofiyivska blocks); preparation of report on geological survey of oil gas block submittg it to State Informational Geological Fund; submission of documents regardg discovered oil gas deposits to State Commission on Deposits of Meral Resources ir approval; preparation of deposits, drillg of production wells commercial production of deposits event that decision is made to pursue commercial production of oil gas. PSA duration: 50 years, unless orwise agreed by parties. <6 months (with possible extension for anor 6 months upon application of tender wner) Stage 3 Stage 4 Stage 5 Stage 6 Determation of tender wner by CMU publishg of PSA tender results Preparation by tender wner of PSA draft its registration with Interagency Commission Review commentg on PSA draft by Interagency Commission Furr negotiations execution of PSA Fish Execution of PSA between tender wner Ukrae 4 Ukrae announces PSA tenders 5

4 Contact us For more formation on se PSA tenders or opportunities Ukraian oil gas, feel free to contact: Vitaliy Radchenko Partner T E vitaliy.radchenko@cms-cmno.com About CMS 48 new partners, takg total to over 1,000 rankgs rankgs rankgs rankgs rankgs rankgs rankgs Br Br Br Br Br Br Br Operatg 67 cities 41 countries >> 7,500 7,500 > 7,500 7,500 >> 7,500 > 7,500 > 7,500 >> 4,500 4,500 yers yers > 4,500 yers 4,500 yers >> 4,500 >yers 4,500 yers > 4,500 yers > 1,000 partners for for forfor for forfor 6 Ukrae announces PSA tenders workg workg workg workg workg workg workg 7

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