Without private investors Ukraine will not be able to significantly increase the production of hydrocarbons
Reduction of Ukraine's dependence on hydrocarbon imports is impossible without attracting large private investments in oil and gas production. At the same time, the state policy in the sphere of subsoil use still causes a lot of complaints from investors. The current system in the country to use subsoil does not meet current world trends, and adopted in the current year non-market mechanisms for regulating relations, in particular between suppliers and consumers of natural gas in general can lead to a decline in its production.
Despite the difficult economic and political situation in Ukraine, Ukrainian and foreign investors are still interested in the development of its oil fields. During 2014 the State Service of Geology and subsoil has already held two auctions for the sale of special permits for subsoil use, which sold 2 of 5 auctioned licenses for exploration (including ODA) oil and gas areas in Poltava and Sumy regions. On 04/12/14, the third scheduled auction for the sale of special permits for subsoil use: from 11 proposed for mining 10 - with oil and gas reserves. In addition, 12/24/14, the fourth Gosgeonedr hold an auction to sell special permits, which will be implemented licenses to develop three hydrocarbon fields in the Lviv and Sumy regions.
In addition, the state-owned company NAK "Nadra of Ukraine" for 2014 held an open competition to attract investment for the development of promising oil and gas properties, such as old-Bohorodchany, Olkhovskaya, Ortynitskaya, Volosyanskaya, North Kotelevskaya, Perevozivskaya, Krasnoilsk and other areas.
Implementation of licenses to develop oil and gas subsurface not only adds to the state budget, but also increases the amount of developed through private investment of hydrocarbon deposits. As of 03/11/14, in Ukraine issued 486 special permits for exploration, including the commercial development of hydrocarbon deposits.
Due to the deteriorating political and economic crisis in Ukraine, investors have been slow to starting work on the Ukrainian fields, but nevertheless in no hurry to give up their development. So, by the end of this year must be signed by an operating agreement with Chevron in the framework of the PSA in 2013; Eni requests to transfer the work program at the end of 2015, and the company Shell, which last year signed an operating agreement, to suspend work as part of the territory, where the planned exploration work carried out fighting. At the same time, others are working in Ukraine independent gas producers show a positive trend: according to operative data, in January-October 2014 "private" natural gas production in Ukraine grew by almost 30% compared to the same period last year, and up to , independent companies can reach the level of production of 2.4 - 2.5 billion cubic meters.
Note that without the investor's oil and gas sector of Ukraine has no chance of development. Since the beginning of the last decade, prospecting and exploration works on perspective areas too expensive for the budget activities. In 2001-2013 gg. actual exploration activities ranged 102 - 583 million USD per year, while the budget provides for the allocation for this purpose 198 - 1,056 million USD. For example, in the 2012 budget provided funding exploration work in the amount of UAH 1 billion, of which USD 500 million was directed to other programs, and in 2013 - only 198.7 million USD. In 2014, the planned flow of funds to the general fund of the state budget from the fee for the issuance of special permits for subsoil use and proceeds from the sale of such permits in the amount of 260 000 000,00 hryvnia. However, the costs of the program "Development of the mineral resource base" (CEACR 2,404,020) are directed to the tasks and activities of the National Program for development of mineral resources base of Ukraine for the period until 2030, approved by the Law of Ukraine of 21.04.2011 № 3268-V. Law of Ukraine "On the State Budget of Ukraine for 2014" of this budget program provided in the amount of 149, 3 million. Hryvnia.
Thus, in 2014, scheduled receipts to the general fund of the state budget of the fee for the issuance of special permits for subsoil use and proceeds from the sale of such permits almost half - 57% - higher than the amount of the cost of prospecting, exploration and other geological works. 2015 draft budget in the amount laid only 120 million USD. Too little.
On the "privateers" hope ...
Mineral base Ukraine has a sufficient reserve of proven hydrocarbon reserves, but most now producing fields in the process of exhaustion, and requires the development of new private investment. The effectiveness of private investors depends on public policy: despite the need to build own production and readiness to implement market reforms in the energy sector and the mineral resources, during 2014 the Ukrainian government made two decisions complicate the work of mining companies. It is about half the increase in rates of rent payments and reducing the proportion of independent suppliers in the natural gas market in connection with the government's decision to oblige the industrial, power generation and heat generating (in terms of industrial gas volumes) company purchases natural gas exclusively from "Naftogaz of Ukraine".
While such measures are declared as temporary, but, nevertheless, they are a danger to the development of private oil and gas production in Ukraine. In mid-November, the head of "Naftogaz of Ukraine" announced that the level of rental payments in 2015 will be returned to the previous level - 28%, which has a positive impact on the profitability of the companies. But such a weakening of fiscal burden is not enough for complex decision problems in the industry, as it is not based on economic parameters of differentiation of fees for use of mineral resources, depending on the complexity of the geological conditions, depth and volume of hydrocarbons required investment on the part of the investor, the power from the initial approved reserves, liquidity at implementation of products produced and as a result - the level of profitability.
In mid-2014 the government announced that the auction will be billed 45 special permits for the development of oil and gas subsurface area: 18 square - shale gas, and the remaining 27 - oil and natural gas. Most of them are promising for feedstock. In this case, the main "financial" role in their development provided to investors. It is by attracting private investment Ukraine plans to substantially increase gas production, reduce dependence on expensive imported resource. But instigated "big sale" may not produce the expected result.
The current system in the country to use subsoil does not meet current world trends, because still not formed uniform requirements and rules of subsoil use, you must balance the interests of mining companies, regions and states. Assumes that non-market mechanisms for regulating relations between suppliers and consumers of natural gas in general can lead to lower production volumes and again force Ukraine to increase the share of imports. In such circumstances, rely on severe infusion into the sector subsoil is not necessary.
December 2, 2014