Almost 2.7 million UAH was transferred by the companies of the Smart Energy Group as a 5% of the royalty for subsoil use in January 2018. The additional funds were received by the local communities due to changes in the Ukrainian legislation and royalty decentralization.
In particular, 1.1 million UAH was received by the communities of the Poltava oblast, where Regal Petroleum Corporation Limited operates, and 1.6 million UAH – by the communities of the Kharkiv oblast, where PJSC Ukrgazvydobutok and Prom-Energo Product LLC operate.
The funds were transferred directly to the local budgets, thus they may be used for the needs of a specific village, region, or oblast. Thus, the communities have received additional perspectives for development of their social infrastructure (roads, schools, hospitals, etc.) and implementation of the important projects.
To remind, in 2017 the companies of Smart Energy Group have paid to budgets and target funds almost 850 million UAH, including 802 million UAH to the state budget, and 48 – to the local ones. In addition, 7.3 million UAH were endowed to support the social projects and develop the regional social infrastructure, including 1.3 million UAH to Poltava oblast, and 6 million UAH – to Kharkiv oblast.
Also to remind, starting January 1, 2018, the Law of Ukraine №1793-VIII "On amending the Budget Code of Ukraine on deducting royalty for production of oil, natural gas, and condensate", which was approved by the Verkhovna Rada on December 20, 2016 (bill №3038), entered into force. The Law provides for the distribution of the royalties paid by the producers between the state budget, which receives 95% of the revenues, and the local budgets, which receive 5%. In particular, 2% goes to the oblast budgets, 2% – to the region budgets, and 1% – to the local budgets, based on the location of the producing facilities. It is the gas producers who were actively supporting the bill all along.
Smart Energy Group is a part of the Smar Holding, and operates in the area exploration and production of the hydrocarbons fields, as well as alternative energy projects.
The petroleum operations of Smart Energy is represented by the gas producing company Ukrgazvydobutok (Kharkiv oblast), and the publicly traded British company Regal Petroleum, which has assets in Poltava (Regal Petroleum Corporation Limited representative office) and Kharkiv oblasts (Prom-Energo Product company).