The Cabinet of Ministers handed over oil and gas plots on the Naftogaz shelf, according to experts

To this end, the Cabinet of Ministers amended Resolution No. 615, Clause 8, which stipulates that only Naftogaz of Ukraine or its subsidiary company (100%) may apply for a special permit without holding an auction. The term of validity of such a special permit is 30 years. The cost of a special permit (fee) is equal to 10% of the initial price at sea depths of up to 100 m, and 1% at depths of more than 100 m.

We will remind you that in March 2019, the Cabinet of Ministers announced a tender for the right to extract hydrocarbons within the boundaries of the Delfin area, under the terms of a production sharing agreement (PSA). At that time, 4 companies submitted applications for the competition: Caspian Drilling International, Frontera, Trident BlackSea, and Ukrainian PJSC MC Ukrnaftoburinnia. However, the Cabinet of Ministers canceled the competition in August 2019.

The ExPro editors asked experts to evaluate the Government's decision to grant Naftogaz of Ukraine a special permit to use the subsoil within the Delfin area.

Mykhailo Gonchar, president of the Center for Global Studies "Strategy XXI":

In the current conditions, the transfer of the section of the Black Sea shelf "Delfin" to "Naftogaz of Ukraine" is the only possible option. In fact, the Government gave the plot to Naftogaz for purchase. This decision can be called optimal under the circumstances of russia's control of a large part of the maritime space in the northwestern sector of the Black Sea. Let me remind you that one of the key tasks of russia in the process of seizing Crimea and Donbas was to prevent the implementation of mega-projects for gas extraction. This is the PSA on the shelf of the Black Sea - the Kerch area and the Skif area, as well as the Yuziv area within the Donetsk and Kharkiv regions on land. As for the Black Sea shelf, after 2014, the Government of Ukraine tried to attract investors to its development, but given the high-security risks, as well as the drop in gas prices, all hopes turned out to be in vain. At the same time, it became clear that only a Ukrainian company can take the risks, and in fact, the only company is Naftogaz of Ukraine. After receiving a special permit, "Naftogaz" will have to start everything from scratch. All technical means, infrastructure, and most of the personnel were lost, leaving a de facto legal entity. And now, a partnership option is suggested. If a national company participates in the project, it is a positive signal for potential foreign partners. However, it is unlikely that we will see large multinational companies in this project. The example of Romania is instructive, on the one hand, there is a noticeable success in offshore projects, on the other hand, if the state makes decisions without taking into account the interests of investors, the latter close down the business. And it is important for Ukraine to take this experience into account.

Ilya Rybchych, ex-head of JSC "Ukrgazvydobuvannya":

I support this decision of the Government. Today, Naftogaz of Ukraine, together with Ukrgazvydobuvannya, is the largest mining company in the country. Moreover, there is the experience in the implementation of mining on marine deposits. In the early 2000s, "Ukrgazvydobuvannya" together with "Chornomornaftogaz" successfully implemented projects on the search for and production of natural gas in the South Kazantip deposit (shelf of the Sea of ​​Azov) and Odesa deposit (shelf of the Black Sea). For Naftogaz of Ukraine, it is necessary to carry out a geological survey and drill at least one well as soon as possible. After that, you can make further plans. Of course, this project will require significant investment. And, in my opinion, it is better for a state-owned company to attract cash loans than to look for partners and give a lot in the project. Thus, the state will retain full control over the strategic project.