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Posted On

08
November
2021

Govt approves two PSAs with EP Ukraine for Hrunivska, Okhtyrska hydrocarbon fields

KYIV. Nov 8 (Interfax-Ukraine) – The Cabinet of Ministers of Ukraine has approved the terms of two production sharing agreements (PSAs) within Hrunivska and Okhtyrska hydrocarbon fields with EP Ukraine B.V. (the Netherlands, a subsidiary of Czech EPH Group).

According to resolutions No. 1405-r and No. 1406 of November 5, 2021, promulgated on the government portal, First Deputy Energy Minister Yuriy Vlasenko is authorized to sign the PSAs, the authorized body for the implementation of agreements is the State Service of Geology and Subsoil.

At the same time, the resolution on signing a PSA with York Energy (UK) Holdings Limited (Great Britain, a subsidiary of American Alpha Energy) for Ichnianska hydrocarbon field has not yet been made public.

As reported, tenders for Hrunivska, Okhtyrska and Ichnianska hydrocarbon fields were announced in August 2019.

In the spring of 2020, the government approved that EP Ukraine B.V. (the Netherlands, a subsidiary of Czech EPH Group) won tenders for Hrunivska and Okhtyrska hydrocarbon fields, and York Energy (UK) Holdings Limited (Great Britain, a subsidiary of American Alpha Energy) – for Ichnianska hydrocarbon field.

The area of Hrunivska site is 1,083 square km, Okhtyrska – 672 square km, Ichnianska – 2,086 square km. According to the terms of the tender documentation, approved at the end of 2018, for the first and second fields, the winners shall drill at least two exploration wells and conduct 3D seismic during the first stage of exploration work (the first five years). The participant who won the tender for the third field shall drill at least three wells and conduct 3D seismic.

In mid-June 2021, the Cabinet of Ministers of Ukraine extended the terms for concluding three PSAs for six months: with EP Ukraine for Hrunivska and Okhtyrska hydrocarbon fields, and with York Energy for Ichnianska hydrocarbon field.

According to the Ministry of Energy, the signing of these agreements will have a positive effect for the oil and gas industry and for the Ukrainian economy as a whole. If they are signed, according to preliminary estimates, at least UAH 1.9 billion will be invested in the oil and gas industry, including at least UAH 900 million when the PSA is implemented at Ichnianska field, and at least UAH 500 million – when executing transactions at Hrunivska and Okhtyrska fields.