On November 13, the Instruments of energy independence and industrial development parliamentary hearings were held in Verkhovna Rada. The officials, MPs, representatives of the gas producers, and experts have discussed the important issues of achieving energy independence and increasing domestic production.
Roman Opimakh, the executive director of the Association, has noted:
"The excess fiscal burden on the gas production industry is restraining its development and does not stimulate the investors to enter the market. Currently, royalty rate is 30% on average, whereas in Europe it is more than two times lower. We are systematically advocating for fiscal stimulation of new gas wells – such an approach will allow to attract new investments, and maintain budget revenues at the same time".
Roman Opimakh also stressed out that besides excessive taxation, large problems of a long and complicated land allocation for new wells, an outdated and bureaucratic permitting system, and the blockage of field allocation by some local council, still remain in place.
Viktor Halasiuk, the Head of the Verkhovna Rada Committee on Industrial Policy and Entrepreneurship:
"It is not very smart to possess large deposits of minerals, in particular, natural gas, coal, and still be purchasing these resources abroad for almost $4 billion annually, as it was last year. Our goal is to create such an environment that it becomes economically feasible to produce natural gas domestically. One of the important questions to be discussed today – decreasing the royalty on natura lgas produced from new wells. At the same time, we must get rid of the "dormant" licenses, where the fields are not utilized efficiently".
Olga Bielkova, the deputy Head of the Verkhovna Rada Committee on Energy, Nuclear Policy and Safety:
"The natural gas in the next 10-20 years will most likely remain the most important energy source for the commercial and household needs. Today Ukraine consumes 35 bcm, but produces only 20 bcm, every though we are the third in terms of natural gas reserves in Europe. To increase gas production, sole political motto are not sufficient, we need huge investments".
As stated by the MP, currently there exists a list of issues, which are restraining the gas production industry's development: incorrent fiscal regime; lack of new licenses; delays with passing the bill 3096-d on simplification of land allocation procedures for the gas producers.
Oleksandr Dombrovsky, the First Deputy Head of the Verkhovna Rada Committee on Energy, Nuclear Policy and Safety:
"Why are we talking about the importance of innovation, investment, and energy policies in the country? Because Ukraine has always been a powerful energy state. I would like to remind you that, when we are talking about imports or exports of natural gas, 40 years ago Ukraine's production was 70 bcm per annum. Moreover, we were exporting it to Russia and to the current European Union members. Ukraine has a vast potential, and we should use it properly".