Comments of 2016

On December 21 the Verkhovna Rada of Ukraine adopted the State Budget of Ukraine for 2017. The decision-making was traditionally accompanied by disputes, search for voices and political arrangements. That night was also marked with the two laws from the "budget package" that have a direct impact on oil and gas production. What impact will it have? Let's try to understand.

The recent decision of the European Commission allowing Gazprom to use more capacity of the German OPAL pipeline has created a swirl in media. Due to this decision, Russia will be able to supply more gas through the Nord Streampipeline and less through the Ukrainian gas transmission system.

A scandal related to selection of companies to develop one of the largest nontraditional gas fields – Yuzivska field – once again stressed the importance of the issue of transparency in the industry. Taking into consideration that the tender was won by Yuzgaz B.V., a company created only one month before the competition was announced, many politicians and experts grew suspicious about the validity of its intentions concerning the work in the field. In particular, the Verkhovna Rada called upon the government to provide complete information on an investor of Yuzivska field.

One of the specialized companies recently declared that the tax burden and absence of deregulation measures reduce investment attractiveness of oil and gas extractive industries.

DiXi Group analysts started development of an all-encompassing online map of the energy sector of Ukraine, which will help identify and disclose hidden information (so-called "black boxes"). This project has to show graphically how energy markets function and where the largest corruption risks are concentrated.

The “offshore” scandal, the notorious investigation of Onyshchenko case and the recent decision on the investor in Yuzivska field much increased the importance of ensuring transparency in the extractive business.

Ukraine seeks to introduce best international standards and integrate into the European community. According to Mr. Taras Tkachuk, expert at Dixi Group think tank, the energy industry is one of the key elements of the Ukrainian economy. Therefore, the introduction of transparency standards is an important step towards the implementation of the necessary reforms.

Why was this draft Law important for the regulator? How will political bargaining around one of the key draft Laws relating to the European integration impact EU–Ukraine relations in the future? Why is the adoption of this draft Law still possible? Mrs. Olena Pavlenko, President of DiXi Group think tank, will answer these and other questions live on hromadske.tv.

The Cabinet of Ministers of Ukraine recently approved the model of unbundling of Naftogaz of Ukraine NJSC. Mr. Taras Tkachuk, DiXi Group’s analyst, commented on this important step for the Ukrainian energy.

Extractive market in Ukraine today, compared to other countries throughout the world, is closed and intransparent, allows limited competition, hence is incomprehensible for foreign investors and companies trying to enter the Ukrainian market.