Prime-minister Volodymyr Groysman is planning to implement a flat royalty rate on natural gas produced at 12% in 2018 with a purpose of increasing state production to 20 bcm by 2020. He stated this in Verkhovna Rada during his Q&A session with the MPs.
"For over 500 days we are living without a single drop of Russian gas. It is very hard work, which has been done since 2014. But we really do need to increase our domestic production. According to the expert opinion, we can satisfy our own demand fully, but this requires time and investments" – the Prime-minister stated.
"Our production was 55 bcm before, and has dropped to the current 20 bcm. Out of 20 bcm, only 14 bcm are produced by the state-owned companies, the rest is independent production. Our goal is to increase the production of state-owned companies to 20 bcm by 2020" – the Prime-minister declared.
According to Groysman, the production drop was stopped in 2016 by the Government.
"We have increased production by 100 mcm. We have approved the strategy for the development of Ukraine's gas production. Today, Ukrgasvydobuvannya has already received 27 permits for development of gas fields" – he stated.
"From 2007 to 2013, 150 special permits were issued in Ukraine. In your opinion, how many were issued to the state-owned companies? Nil. Those were the corruption proceses, which we have broken. That is why some are disappointed by this" – the Prime-minister noted.
"But we need to increase production further. The plan for 2017 is +500 mcm – at least half a billion of cubic meters of additional gas for this production year! But it is still not enough" – Groysman stated.
He added that the necessity of creating favorable conditions for natural gas production was recently discussed during the meeting with the faction "Blok Petra Poroshenka".
"The two critical conditions are: to finally decrease royalty to a flat 12% royalty on new wells starting 2018..., and the industry should be deregulated, because heavy over-regulation does not give access to gas production in the country" – the Prime-minister stated.