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Ukraine expects to raise $22 billion by 2030 to develop energy deposits
21 April 2011
Ukraine plans to raise $22 billion (Hr. 180 billion) in private investment by 2030 and invest Hr. 20-26 billion in government funds into exploring for mineral resources, Ukrainian Ecology and Natural Resources Minister Mykola Zlochevsky said in an interview with the Dilova Stolytsia weekly.

He said that the approval of a new procedure for holding auctions to sell special permits for deposit use, a draft of which will be considered this week by the cabinet, will help the said indicators be achieved.

"The system will start working a month after the cabinet approves the new procedure. An auction committee, which will propose fields to put up for sale at auctions, will be created. The task of the auction committee is to prepare fields so that investors who buy the rights to develop them will not have to register additional documents at other ministries," Zlochevsky said.

The minister said that permits for all fields would be sold at auctions, apart from strategic fields and unexplored fields. PSA agreements will be signed for the latter fields.

"We took Kazakhstan as an example, as investors are eager to explore and extract deposits there. The profit under PSA agreements in Kazakhstan are divided in a ratio of 80 percent to investors and 20 percent to the state. Investors' expenses are strictly controlled, so that they can't be exaggerated, and after the return of investment the profit is divided 50-50," Zlochevsky said.

The minister said that state-run companies would have a top-priority right to obtain permits for unexplored fields only.

The minister said that in 2010 the national budget received over Hr. 300 million from the sale of permits for deposit use, and the key source of revenues were small fields with deposits, and not oil and gas fields.

"I hope that with the facilitation of the procedure for the issue of permits and increase of the number of fields to be sold at auctions, in 2011 we will raise at least Hr. 500 million," he said.

Source: Interfax-Ukraine, Kyiv Post

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