The government should open the essential terms and conditions PSAs once they are signed
As soon as production sharing agreements are signed between the government and the tender winning companies, the essential terms and conditions of the agreements should be made public.
The DiXi Group Analytical Center reminds that, under the Law of Ukraine “On Ensuring Transparency in the Extractive Industries”, the Ministry of Energy and Environmental Protection must publish on its website information about the essential terms and conditions of subsoil use agreements, which also include production sharing agreements.
The essential terms and conditions to be made public as soon as the production sharing agreements are signed include:
- name of the agreement, its number, date of conclusion and names of the parties;
- date of entry into force and validity period of the agreement;
- subject of the agreement;
- rights and obligations of the parties regarding the use of subsoil, other rights to natural resources;
- guarantees for the stability of the rules of legislation (if any);
- terms of payment peculiarities;
- operational obligations, including work programs;
- environmental protection obligations;
- requirements for the safety and labour protection of employees and contractors and their employees involved;
- social obligations, including regulations on participation in the development of local infrastructure and regulations on the use of works, goods and services performed, supplied or provided by economic entities registered within the territorial community in whose territory activities are conducted in the extractive industries, requirements for holding public hearings.
According to the requirements of the Law, companies must provide the Ministry of Energy with this information (with the relevant extracts from the production sharing agreements) within one month from the day of their conclusion or amendment. In turn, the agency has a month from the day of receiving documents for official publication.