On December 7, Verkhovna Rada has made an important step to energy independence – has passed the amendments to the Tax Code of Ukraine. Bill 6776 has been voted for by 252 MPs.
According to the approved document, starting January 1, 2018:
- a stimulating royalty on the natural gas, produced from new wells onshore, of 12% and 6% for wells above and below 5 km deep, respectively, has been introduced;
- a stabilization clause is introduced for such projects – a ban for increasing the royatly rates for 5 years (until 2023);
- the royalty rate for PSAs are returned to 2% and 1.25% for oil and gas, respectively (on such PSA projects, the investor usually transfers part of the goods produced to the country);
- the royalty rate for gas condensate is levelled out with the royalty for oil (29% and 14% depending on the depth), starting 2019.
"A true holiday has been gifted by the President, the Government, and the MPs, by making the strategically important step towards large investments in the domestic gas production industry" – stated Roman Opimakh, the executive director of the Association.
This year, we still have the bill 3096-d to be passed, which should speed up land allocation for wells, and simplify the permitting procedure for petroleum projects, as well as help organize serious auctions on new fields and PSA projects.
Photo – press center of the Verkhovna Rada of Ukraine