Ukraine Simplifies Upstream Regulations

In a bid to increase national oil and gas production, Ukraine's president Petro Poroshenko has simplified the legal process for acquiring land for oil and gas development and laying pipelines, signing into law the amendments agreed by parliament March 1. The law changes or scraps other permitting regulations and also allows producers to use the acreage before the approvals process is complete as long as the landowner is satisfied.

It also allows other entities than the state reserves committee to carry out geological assessments of oil and gas reserves. And it speeds up the licensing procedure for hydrocarbon production, potentially reducing the time for obtaining permits from about 42 months to 24 months.

Naftogaz Ukrainy expects the country's oil and gas industry to be able to produce another 1bn m³/yr, thanks to these improvements, although the government's highly ambitious aim is for the country to produce 27bn m³/yr by 202o, making it almost self-sufficient, compared with about 20bn m³/yr last year, when demand was 31.9bn m³, according to Naftogaz.

Also, from 2018, 5% of rent payments will be paid to local budgets, which has the further potential to speed things along at a local level. "This year, the government expects rent payments to reach hryvnia 37bn ($1.4bn), which means that about hryvnia 1.8bn will go to local communities," Naftogaz told NGW April 2.