Production sharing agreements are used in many countries around the world. This mechanism was first used in Bolivia in the early 1950s and then in Indonesia in the 1960s.
Marta Halabala, Olena Sichkovska
According to a production sharing agreement, one party, Ukraine (the State), appoints the other party, the investor, to prospect for, explore and extract mineral resources in designated subsoil area(s) and to perform the agreement-related works for a specified period of time, while the investor undertakes to perform the assigned works at its own cost and risk, with further compensation for the costs and receipt of payment (remuneration) in the form of a portion of the profit from production. Such definition of production sharing agreements is provided for in the Law of Ukraine On Production Sharing Agreements (the PSA Law).
Today, the external economic relations between the states are formed primarily through the oil and gas sector. Ukraine, given its territorial position, is an important transit hub through which oil and gas trade between Europe and Asia is conducted.
State-owned National Joint Stock Company Naftogaz of Ukraine is the leading enterprise of the fuel and energy complex, one of the largest Ukrainian companies, and is actively involved in the formation of commercial relations between Ukraine and other countries.
Renewable energy has, by now, become a household term in Ukraine. The capacity of renewable energy (“RES”) projects in Ukraine has grown by 3,968 MW between 2015 and Q3 2019. Total capacity growth in Q3 2019 alone was 2,661 MW. The total sum of investments to construct such 3,968 MW of power plants was approximately EUR 3.4 billion.
The segments of the new electricity market in Ukraine provided for by the Law of Ukraine On the Electricity Market, as balancing, ancillary services segment, “one day in advance”, intra-day and bilateral contracts, obligatory conditions of participation in which for individuals, who are non-consumers, are contracts that ensure the functioning of such a market, should have come into effect from 1 July 2019 in Ukraine.
AVELLUM advised Metinvest
INTEGRITES advised ÜMITLI on construction of solar PV plants in Ukraine
Naftogaz’s Eurobond offering
Company of UkrBud group got AMCU to cancel 127 million fine imposed for collusion
Court rejected claim filed by Privatbank against Dniproavia
Supreme Court sided with Supreme Court removes ban on sale of Prominvestbank
Parliament upheld draft law on financial monitoring in first reading
Step taken towards abolishing state monopoly on alcohol production
Land market set to start operating in 2020
Draft law on cryptocurrency legalization submitted
Plastic bags to be banned from 2022
President signed law on ratification of US tax treaty
Parliament approved law on gas transmission network separation from Naftogaz
National Bank raised tariffs on cash provision to banks
Law on protection of intellectual property during customs clearance of goods signed
Ministry of Justice opened up single register of entrepreneurs in full
AmCham Ukraine Thanksgiving Black Tie Dinner and Award Ceremony 2019
The American Chamber of Commerce in Ukraine held its traditional Thanksgiving Black Tie Dinner and Award Ceremony 2019 in Kyiv on 16 November. For the fifth year in a row, the American Chamber of Commerce recognizes organizations, projects and individuals who have made an outstanding contribution to the development of a favorable business and social environment in Ukraine or promoted Ukraine internationally. Representatives of the Chamber member companies named those who they would like to thank.
Denmark granted permit for Nord Stream-2 construction
Google acquired Fitbit, fitness tracker manufacturer
Doing business-2020: top of the rating
S&P raised Kyiv’s credit rating
Moody’s confirmed Ukraine’s rating and improved outlook to positive
Uber aims to enter financial services market
Ukraine to get EUR 900 million from EBRD & EIB for road building
Acquisition of Vodafone Ukraine
Google to impose stricter rules on political adverts
Swiss company relocates plant from Poland to Ukraine
The Ukrainian energy sector is perhaps one of the most turbulent in light of regulatory changes and challenges ahead for its key stakeholders, population and the Ukrainian state. Tenders held recently for Production Sharing Agreements revived the interest of international energy majors seeking not only profitability but clear understanding of policy incentives, a stable competitive environment and unfailing understanding that their investment is secure at the highest level. Dr. Alexey Kot, managing partner of Antika Law Firm, outlined the opportunities present in this sector and shared his concerns on pressing issues emanating from the perspective of the energy business.
With the evolving role of the legal profession and expanding internationalization of legal services, the function of regional professional forums in supporting multicultural discussion is gaining more importance. The IBA ECA (Europe – Caucasus – Asia) Forumhosted by Georgian firms took place on 31 October — 2 November 2019 in Tbilisi.
Last month was rather rich in legislature-changing activity, and some of these actions caused strong waves of discussion, particularly the so-called Unbundling Law and Draft Law No. 2233, both of which caused quite noticeable changes in the energy field. Other substantive legislative acts are the government’s Drafts On Regulating Gambling and No. 2179 On Preventing and Countering Legalization (Laundry) of Proceeds of Crime, Financing Terrorism and Financing Proliferation of Weapons of Mass Destruction. The UJBL editorial team asked experts to provide some comments on these legal issues.
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