Terms of the tender for the development of hydrocarbons within the "Delfin" site on the Black Sea shelf under the terms of the PSA

The Cabinet of Ministers of Ukraine agreed with the proposal of the Interdepartmental Commission for the Organization of the Conclusion and Implementation of Production Sharing Agreements (PSA) regarding the holding of a competition for the conclusion of the PSA of hydrocarbons to be produced within the Dolphin field and approved the terms of the competition.

The Delfin area is located within the northwestern part of the continental shelf of the Black Sea, the minerals are natural gas, shale gas, central basin type gas, gas (methane) from coal deposits, oil, and condensate. The site includes all sedimentary deposits within the perimeter and is limited in depth by a mark of 10 thousand m from the surface or by the geological foundation (depending on which will be reached first).

According to the terms of the tender:

1) Persons who have special permits for the use of subsoil and do not properly fulfill the duties of a subsoil user, in particular, work programs on the subsoil area and other duties, are not allowed to participate in the competition;

2) To participate in the contest, the participant (participants) submits an appropriate application in an arbitrary form, which must contain, in particular:

- brief information about work experience in the field of subsoil use, as well as information about technical and financial possibilities for performing work and about technologies that will be used when using subsoil, confirmed by documents;

- the program of works on the subsoil area, incl. on the fulfillment of the main conditions of the competition, with the indication of measures aimed at the protection of the subsoil and the natural environment, as well as the dates of the start and completion of works;

- sizes and types of investment;

- proposals regarding the division of extracted products;

- an obligation to train personnel and use products, goods, works, and services of Ukrainian origin under equal conditions regarding price, delivery time, quality, and compliance with international standards;

- social development program;

3) Consideration of registered applications and the materials attached to them by the participants of the competition is carried out taking into account the following criteria:

- the focus of the work program on the subsoil area is on the comprehensive development of the area and ensuring early production;

- the rationality of the conditions for the use of natural resources in accordance with the program of works on the subsoil area;

- the attractiveness of proposals for the distribution of products for the benefit of the state;

- the largest amount of investment;

- effectiveness of environmental protection measures;

- the level of financial support of the proposed program of works on the subsoil area;

- having experience in the search and production of hydrocarbons, in particular, on the sea shelf;

- ensuring the use of goods, works, and services of Ukrainian origin;

4) The winner of the competition must ensure that the following works are carried out:

- the geological study of the subsoil on the site, including drilling of at least five wells during the first stage of geological exploration (five years);

- drawing up a report based on the results of the geological study of the site and submit it in accordance with the established procedure to the State Geological Information Fund;

- in the case of discovery of a hydrocarbon field - submission to the State Commission for Mineral Reserves of materials on the assessment of hydrocarbon reserves for the approval of such reserves;

- if the investor decides to move to the stage of industrial development - development of the deposit (deposits), drilling of production wells and industrial development of hydrocarbon deposits;

- carrying out an environmental impact assessment of the PSA project;

5) The minimum amount of investments that must be made during the first stage of geological exploration works is determined based on the results of the competition and must be at least UAH 1.5 billion;

6) All produced products until the moment of distribution between the state and the investor belong to the state. The maximum part of compensatory products, at the expense of which the investor will be compensated for his expenses, is 70% of the total volume of produced products until the investor's expenses are fully reimbursed. The state's share in profitable products should be at least 11% of the total volume of such products;

7) The winner of the competition and the state represented by the Cabinet of Ministers of Ukraine conclude an agreement for a period of 50 years unless otherwise agreed by the parties;

8) The investor adds to the application for participation in the competition information about the optimal economic, technological, nature protection and other measures for the rational use of the subsoil, in particular, regarding:

- the earliest possible start of industrial production of hydrocarbons and the achievement of maximum volumes of hydrocarbon production;

- use of the latest, environmentally safe technologies, equipment, and advanced technical developments to ensure effective search and extraction of hydrocarbons;

- technological solutions and measures to be taken to protect atmospheric air and prevent greenhouse gas emissions;

9) The deadline for submitting applications for participation in the competition is two months from the date of publication of the announcement of the competition;

10) A fee of UAH 300,000 or the equivalent of this amount at the NBU exchange rate on the day of payment in foreign currency is charged for participation in the competition. The Interdepartmental Commission for the Organization of the Conclusion and Implementation of the PSA is tasked with ensuring the organization of the competition in accordance with the requirements of the Law "On Product Distribution Agreements", in particular:

- within two months from the date of the decision to hold the competition, develop and approve the competition documentation and ensure the placement of an announcement about the competition in the official printed editions of Ukraine and foreign mass media;

- to ensure the acceptance of applications for participation in the competition within two months from the date of publication of the announcement of the competition;

- to prepare and submit to the Cabinet no later than within one month from the date of completion of the deadline for submission of applications for participation in the competition, conclusions and proposals for determining the winner of the competition.

Link:

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Reference: The area of ​​the "Delfin" site is 9,536.41 sq. km. There are several exceptions to the area of ​​the site - sites for which a special permit for the use of subsoil has already been granted (Odesa and Bezymenne deposits, Riftovaya and Kulisnym areas and Gubkina area).

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