Cadogan Inks Exploration Licensing Deal with Ukrainian Ministry
Cadogan has signed an agreement with the Ministry for Environmental Protection of Ukraine with regard to their mutual cooperation in oil and gas exploration and development in Ukraine. The Ministry is responsible for the award of exploration and development licenses and production licenses and for prescribing special conditions and work obligations attached to these licenses.
Significantly, the agreement recognises Cadogan's exclusive right to the exploration and development of the Company's Zagoryanska, Pirkovskoe, Krasnoyilske, Bitlyanska and Monastyretske licenses, Cadogan's full compliance of procedures during their acquisition and the significant investments made by the Company in Ukraine.
Under the terms of the agreement the Ministry has agreed, inter alia:
- to provide support to Cadogan in issuing special permits for the commercial production of mineral resources on the Licenses (transfer of exploration licences to production licences) following compliance by Cadogan with its work obligations; and
- that both shall protect Cadogan's exploration and development rights on the Licenses in the event of any third party claim or application to challenge or invalidate them.
Cadogan has for its part agreed, inter alia, to:
- ensure the maximum possible engagement of Ukrainian enterprises in the exploration and development activities, including specialised entities controlled by the Ministry;
- perform the exploration and development of the Fields in strict compliance with applicable, and notably ecological and environmental, legislation; and
- to finance fully the exploration and development of the Licenses.
Mark Tolley, Chief Executive of Cadogan Petroleum, commented, "This agreement is an important milestone for Cadogan and further recognises and underscores our commitment to investing and developing the Ukrainian oil and gas industry. We are pleased that the government continues to show support for increasing domestic production and we look forward to working with the Ministry and all relevant state bodies to successfully commercialize our significant resource base."