Ukraine Awards Nine Blocks in PSA Tenders

The Ukrainian government concluded July 1 the bidding round for international production sharing agreements, said the Association of Gas Producers of Ukraine. The nine upstream blocks cover 11.400 km² of onshore acreage but only three of the winners are international oil companies. 

Seven companies have been selected as the winners: state Ukrgazvydobuvannya, a subsidiary of Naftogaz Ukrainy, won two blocks (Buzivska, Betestianska) on its own and two more in partnership with Canadian Vermilion Energy (Balakliyska, Ivankivska).

American Aspect Energy won the tender for the "sizeable" Varvinska block; and four Ukrainian producers – Geo Alliance, UNB, DTEK Oil & Gas, and Zakhidnadroservice – made the best bids on the Sofiivska, Rusanivska, Zinkivska, and Ugnivska blocks.

The winners will commit to five-year spending plans involving over $430mn in the processing of 3D seismic, drilling 39 exploration wells and recovering legacy idle wells. 

The companies will share the rewards with the government on a variable basis depending on the oil price. The government has up to two months to approve the results and the winners will then have one year to draft and sign the final deals.