Page 14 - FSUOGM Week 35 2020
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FSUOGM POLICY FSUOGM
Ukraine's Naftogaz vows not to give
up in licence dispute
UKRAINE UKRAINIAN gas firm Naftogaz has vowed company’s special permits is unlawful,” Naftogaz
to keep fighting a 2017 decision by authorities said in a statement. “Naftogaz will continue to
The licences were to cancel three of its exploration licences, even challenge this decision in the courts.”
revoked in 2017 and though rights to one of the blocks in question Naftogaz said it had invested some UAH1bn
one of the blocks in have now been awarded to another company. in developing the three blocks between in 2011
question has now been Ukraine’s state geological service (Gos- and 2016, including UAH750mn at Budysh-
awarded to another geonadra) has awarded a 20-year exploration chansko-Chutivska. Its work at the site com-
company. licence for the Budyshchansko-Chutivska block prised 3D seismic collection and other surveys,
in the Poltava region to a firm called Nafto- as well as the drilling of three exploration wells.
gazgeorozvidka, it announced on August 31. Those wells found three fields.
Naftogazgeorozvidka is a subsidiary of DTEK, According to Naftogaz, Gosgeonadra
Ukraine’s largest energy company, which is revoked the licences based on a decision by the
owned by oligarch Rinat Akhmetov. Poltava regional council that “contained no sub-
Gosgeonadra held a tender for a licence stantiations and supporting documents” and
which attracted bids from five companies. relied on the “unfounded and biased appeals” of
The licence sold for UAH650.5mn ($23.7mn), its individual members.
which is nearly eight times the starting price Contacted by NewsBase, Gosgeonadra noted
for bids. that the Kyiv Court of Appeal, the Supreme
Budyshchansko-Chutivska contains 2.73mn Administrative Court of Ukraine and the
tonnes (20mn barrels) of oil and 856mn cubic Supreme Court of Ukraine had all ruled against
metres of gas. It was previously operated by Naftogaz in the dispute. Naftogaz’s upstream
Naftogaz, but the state company had its licence unit Ukrgasvydobuvannya took part in the auc-
revoked by Gosgeonadra in 2017. The regulator tion for the Budyshchansko-Chutivska block,
also suspended Naftogaz’s rights to two more Gosgeonadra told NewsBase, but its bid of
blocks in Poltava, Obolonska and Pysarivska. UAH650mn was beaten by Naftogazgeorozvid-
“The decision of Gosgeonadra to revoke the ka’s offer.
Rosneft seeks tax changes after losses
RUSSIA RUSSIA’S Rosneft has reportedly proposed ($724) per tonne for 2020.
changes to a mechanism in taxation that penal- Rosneft suggests replacing this fixed refer-
Russian oil companies ises companies for charging too much for motor ence price with actual on-exchange prices in
sustained billions in fuels in Russia. Russia, or reducing damper payments to the
losses because Russian Under the so-called damper mechanism, government to zero when wholesale fuel prices
fuel prices were higher introduced last year, companies pay more in tax in Russia are 10% below the reference price.
than in Europe. when domestic fuel prices are higher than export “The Ministry of Finance has previously
prices. But when Russian prices are lower, they stated that any amendments to the damper
receive a subsidy. mechanism would be unacceptable, as they
The collapse in European fuel demand as a would lead to budget revenue losses,” VTB Cap-
result of coronavirus (COVID-19) led to compa- ital (VTBC) said in a research note on August 28.
nies paying unprecedented amounts under the “We think that if any such amendments were to
damper – RUB236bn ($3.2bn) in total during be implemented, they might be compensated by
the first half of the year. introducing an additional tax burden on the oil
Rosneft, the country’s biggest fuel retailer, has industry through other channels.”
called for its formula to be adjusted to reduce its Reducing damper payments would provide
losses incurred during the crisis. It has sent a let- a boost to Russian refining, the bank said, but
ter to the government, and a meeting took place producers would end up paying more mineral
to discuss the damper at the energy ministry on extraction tax (MET), due to a damper-linked
August 25, sources have told Kommersant. No component.
decisions were taken, however. “If the changes to the damper mechanism
Under the current formula, the damper for suggested by Rosneft were to materialise, we
gasoline is calculated as 68% of the difference estimate this would have a combined gain effect
between the export price and a reference price of $0.5bn on Russian oils, raising the sector
set by the government. That price is RUB53,600 EBITDA by around 1% in 2021,” VTBC said.
P14 www. NEWSBASE .com Week 35 02•September•2020