The Ministry of Energy was the venue for signing an agreement on the distribution of hydrocarbons to be extracted within the Varvinsk section between Ukraine and Ukrainian Energy L.L.C.
The deal was inked by Deputy Minister of Energy Yurii Boyko on behalf of the State.
Moreover, the Government also designated the State Service for Geology and Subsoil of Ukraine as the authorized body to ensure the implementation of the Agreement.
The conclusion of a production sharing agreement with the Ukrainian Energy, founded by the American investor Aspect Energy, provides an opportunity to attract additional investment in the search and production of hydrocarbons in Ukraine, to introduce advanced technologies, increase the growth of domestic natural gas production and reduce Ukraine's dependence on natural gas imports.
The joint efforts of representatives of the Government and investors have enabled to hold systematic work to form mechanisms for the implementation of the Production Sharing Agreement, which is concluded for 50 years.
The American company Aspect Energy has undertaken to invest at least UAH 1 billion in the first stage of site development.
As a reminder, by the order of July 5, 2019, № 507-r, the Government agreed with the proposal of the Interdepartmental Commission for the organization of the conclusion and execution of PSA to determine Ukrainian Energy L. L. C. the winner of the tender for the conclusion of an agreement on the distribution of hydrocarbons to be extracted within the Varvynska section.
Production sharing agreements (PSA) are a tool for attracting significant investment in large-scale mineral exploration and development projects, including hydrocarbons. This is the eighth agreement signed by Ukraine. On December 31, 2020, Production Sharing Agreements were signed for 7 sections: Sofiyivska, Uhnivska, Balakliyska, Ivanivska, Zinkivska, Buzivska, Berestyanska.