R. Storozhev: with the introduction of standard EITI, the state will have to report how many received with subsoil and for taking

Prospects for the development of gas production business in Ukraine are very good in terms of long-term strategy. If we talk about the short-term plans of mining companies and the possibility of their business interests, while operating conditions to develop business for the extraction of hydrocarbons in Ukraine is difficult and not cost-effective. Why are such radically different predictions can be made? Writes about this in his blog Roman Storozhev, president of the Association "Ukrainian Subsoil users."
"In Europe, the liberalization of the gas market goes. The formation of new trading platforms, strengthen the position of new suppliers, the market system is improved sales. All the efforts of the Europeans on de-monopolization of the market have resulted in lower prices and the active formation of a new and effective as we can see the model of the energy market. Ukrainian gas sector is becoming more closely integrated into the European. Our relationship with "Gazprom", mediation talks on gas supplies to Ukraine the European side, the active participation of the Energy Community in law reform the Ukrainian gas market - all this shows that the cooperation will be closer. But for effective collaboration are necessary to create a liberalized market in the form of a complete platform for energy trade. Ukraine has 45 million. Consumers in the face of population, plus industrial complex and heating utilities. Therefore, this marketplace can be a convenient tool for mining companies to implement their resources at the market price, and consumers will make it possible to choose a supplier with the most favorable conditions. If the gas production will be governed by clear, stable legal regulations focused on the economic feasibility and the business interests of both the state and the investor, we can say with confidence - Ukraine will have a lot of investment proposals, and the gas industry will develop, "- said R. watchman.
According to him, of course, the demand for natural gas in the country have to be met not imported resources, and maximize the use of its own reserves of natural gas production. Therefore, the development of various projects for the extraction of both conventional and unconventional hydrocarbons may be an additional source of fuel for the gas trading platform in Ukraine. 30% production growth private companies in the past year - a clear signal that a private investor and effective resources of hydrocarbon deposits allow to increase the volume of recoverable reserves. But only if the investment in drilling, exploration.
"But the high rents forced the company to reduce investment to a minimum. And now the conditions of hydrocarbon production in Ukraine increasingly resemble those that apply to mining companies in the exporting countries. And even then not all. But being an importer of about 50% of its natural gas in the country, we can not afford, along with expensive imports and more expensive projects for the production of hydrocarbons. Therefore, without the gas production tax reform this year, we will launch a very dangerous process: production decline and withdrawal of investors, lose modern mining technology and its own highly qualified talent pool geology. I think everyone here has repeatedly talked about the rent. And there is an understanding: the problem of taxation lies not only in the high-stakes payments, because in Ukraine just simply do not have the standard tax reporting for mining companies. It does not allow the investor to understand how a price for a license as rents generated in each specific field. Although the effectiveness of the rules of taxation will work if the tax rules will be introduced for each object subsoil and calculated on the basis of clear methodology. And the meeting of the interdepartmental working group on reform of the tax legislation in the oil and gas sector, which took place on April 1 with the Prime Minister of Ukraine, Minister of Finance, we hope, will give insight: in the competition for investment Ukraine must offer competitive conditions, the stability of the rules of the game and ensure investment protection.
The first step may be to support the bill №2120 from 02.21.2105, which will be considered at the next plenary week Verkhovna Rada (April 7-10). Let me remind you that lawmakers propose to amend the rental fee in the extraction of natural gas and 15% at depths greater than 5000 m, up to 28% at a depth of 3000-5000 m, up to 35% at a depth of up to 3000 m ", - stressed R. watchman.
Next you need to talk about the adoption of the bill "On the Natural Gas Market", who voted in the first reading. Its provisions suggest that the market will be liberalized and mining companies will be able to realize the produced hydrocarbons on the principles of freedom of contract. According to European experts, its principles allow to stabilize relations in the energy sector. And energy stability implies that the interests of strategic investors will not be infringed.
Followed by innovation, including at the legislative level may be the introduction of standard reporting EITI, which gives information about the extent to which companies pay taxes, which socio-economic projects were implemented. The State will also need to report, as with subsoil received and spent on that. As part of the implementation of the standard initiative group of stakeholders, developed a draft law "On Amendments to Certain Legislative Acts of Ukraine concerning the strengthening of the Extractive Industries Transparency in Ukraine." The bill provides for amendments to the Code of Ukraine on mineral resources and the Law of Ukraine "On Oil and Gas" following nature: mining companies are required to provide and publish information about state and local taxes and fees, and other payments, as well as on production (economic) activity, and other information necessary to strengthen the Extractive Industries Transparency in accordance with the procedure approved by the Cabinet of Ministers of Ukraine. Head of the Association notes the proposed changes to their effective implementation must be sufficiently spelled out specifically, though, subsequently, such rules will make it possible to make the industry more transparent. On the way to obtain the status of the country's successor EITI is currently in Germany. But the desire to increase the investment attractiveness has led to the fact that the country is far ahead of the EU to Ukraine in terms of legislative changes, and the mining companies already provide public access to their accounts.
According to the materials LEAGUE. Blogs
April 07, 2015