Virtual points and real expenditure: oil and gas week

The Cabinet tried to appeal the decision of the District court of Kiev to recognize illegal the failure of the government to give the company Yuzgaz share in the agreement on production section (SRP) in the development of the yuzovska field. The court of appeal dismissed the appeal, arguing that the government violated procedures: any decision of the Cabinet should be made in the form of an order, not a Protocol decision. The court also referred to the absence in the complaint of the strong reasons for the refusal Yuzgaz and ordered the Cabinet to continue its consideration of the request of the company Yuzgaz B. V. and LLC “Nadra Yuzovsky” on the consent to the assignment of shares in PSA.

Last week, the media quoted an interview with commercial Director of “Naftogaz” Yuriy Vitrenko, in which it was, in particular, and about the multiple reduction of the tariff for transit of gas through Ukraine in 2020. Yuri Vitrenko on his page in Facebook reiterated that it will be possible, when “Gazprom” will pay for power, which Ukraine reserves for transit, not only for the actually used capacity on a quarterly and annual basis. An important condition of reducing the price of long – term booking of 110 billion cubic meters capacity of the GTS.

Despite the pressure from Russia in the construction of bypass pipelines, according to oil and gas market analyst Mikhail Korchemkin, Gazprom will have to make certain concessions: “the Bypass of Ukraine’s GTS will entail not only an increase in costs of “Gazprom”, but the decline in the price of Gazprom’s gas in Europe. For the deterioration of conditions of delivery of the goods does not pay the buyer and the seller.”

At the end of the week the national Commission issued a decision No. 615 dated April 28, 2017. Now the operator GTS will have the right to combine the physical entry point into the CTA from the mining company in one virtual. According to natsregulyatora, the solution should improve the conditions of cross-border trade. Earlier, mining companies have complained about the disadvantageous position of Ukrainian companies in comparison with foreign gas traders because of the need to pay for the use of the entry points to the GTS actually twice. In turn, the company has published new conditions for financial support of balancing the system at some points of the GTS. This initiative of the regulator is unlikely to be the last issue with the log in GTS for mining companies, which perceive such a charge as the actual rent, because the entrance to the CTA for the gas producer part of the production process.

Initiated by “Naftogaz” in March, an internal review of “Ukrtransgaz” revealed violations of procedures of tender procurement of services diagnostics of pipelines. We are talking about a contract in the amount of $ 10 million between UTG and West Pipelines Integrity Testing and Treatment Services (UAE). In this regard, “Naftogaz” has filed a lawsuit on termination of the contract.

Gosgeonedra not extend “Ukrnafta” licenses for nine fields, the total production volume which is approximately 20% of the total oil production per year. The reason for non-renewal of permits for production served as the tax debt of state-owned companies in the amount of 12.5 bln. “Ukrnafta” has reminded of the decision of the court, according to which the tax arrears cannot be a ground for refusal to renew licenses.

Program of the subsidiary for the purchase of drilling equipment and modernization of compressor units, is scheduled for the third quarter of 2017 may be implemented by credit of the EBRD and the European investment Bank. Financial institutions will consider a loan of $ 76 million.
The tender for the drilling of two lots, the winner was the Croatian Crosco Integrated Drilling & Well Services Ltd. The cost of the contract with the company, according to ProZorro will be 792,581 mln.

At this point in UGD report on the fulfillment of the plan for gas production in the 18 024 million cubic meters, and the volume of drilling — 2 137 m.

JKX Oil&Gas plc may change the composition of the Board of Directors. The owner of a 28% stake in JKX company Ltd Eclairs Group, which initiates as the sole Director of the company appointment of Michael Bakumenko. According to JKX, this will require a review of corporate and statutory documents.

Inna Kucherenko, expert oil and gas market