Ukrnafta: 16 Licenses could be Suspended

Ukrnafta announced Friday that it has received a formal notification from the State Service of Geology & Mineral Resources of Ukraine that 16 licenses could be suspended, in addition to three recent suspensions.

Suspension of these 16 licenses would stop production of approximately 320,000 tons of oil and 210 million cubic meters of natural gas in 2016. This is a “significant portion” of Ukrnafta’s annual production, according to a company statement, which would place “undue stress on the Ukraine’s energy security and the future growth of company”. 

Ukrnafta has stated that the majority of the reasons used as a basis for the suspensions “are related to the ongoing historical rent-tax liabilities while others cite reasons that have been previously resolved”. One of the licenses under the suspension order relates to the Verkhne-Maslovetskoe field, where Ukrnafta recently announced the spudding of the first development well in 2016.

Commenting on the fiscal implications of the suspensions, Ukrnafta claimed that significant costs would be required to safely halt production facilities and producing wells, which will “inevitably be damaged during the suspension process and may never return to current levels of production”. The company estimates that approximately 1,000 employees would be affected by the suspensions, either directly or indirectly.

Ukrnafta’s Chairman of the Executive Board Mark Rollins said in a company statement:

“At times of long-lasting world oil price decrease, special permits suspension would be the most radical measures, which neither the company nor the state will benefit from. This practice of licenses suspension won’t generate any more tax to the state budget. On the contrary, it will neither let the company settle its existing tax liabilities, nor pay its current monthly tax to the state and local budgets, as it will significantly reduce oil and gas production.”

Have a news tip? Share it with Rigzone!


Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

Related Companies

Our Privacy Pledge

More from this Author
Rigzone Staff
e-mail us at
 -  ExxonMobil Starts Fuels Production at ... (Sep 21)
 -  How to Become a Safety Engineer (Sep 18)
 -  How to Become a Geologist (Sep 15)
 -  Oil, Gas Industry Leadership Group to ... (Sep 14)
 -  CB&I Wins China PDH Unit Contract (Sep 11)

Most Popular Articles

From the Career Center
Jobs that may interest you
Contract Specialist
Expertise: Contracts Administration
Location: Lake Charles, LA
Division Order Analyst - DJ Land Administration
Expertise: Business Analyst|Commercial Management|Landman
Location: Denver, CO
United States Duncan: Field Materials Coordinator
Expertise: Materials Management |Supply Chain Management
Location: Duncan, OK
search for more jobs

Brent Crude Oil : $56.86/BBL 0.76%
Light Crude Oil : $50.66/BBL 0.21%
Natural Gas : $2.959/MMBtu 0.30%
Updated in last 24 hours