The Ukrainian government has pulled away from the agreement with the U.S. company Vanco International. The license given to Vanco to develop and produce hydrocarbons on the country's Black Sea shelf is no longer seen as valid, the government press service said this week.
The exploration and production license issued to Vanco International Ltd., has been withdrawn according to statement given by the Prime Minister Yulia Tymoshenko.
Earlier this week, the prime minister said the deal with the U.S. company was unacceptable, and described it as a plundering of the country's mineral resources.
Vanco International had signed a 30-year production sharing agreement (PSA) with former premier Viktor Yanukovych's government in October 2007, covering the Prykerchenska area just south of the Crimean Peninsula.
The company was to have a share of 65% and Ukraine 35% at the prospecting and development stage. The sides were to go 50-50 with the launch of commercial production.
This set back of already signed PSA, will question whether Ukraine is ready for international activities on the offshore shelf areas in the Black Sea and Sea of Azov. More details from the ministry and departments are needed to analyze what will be the next step for the government in Ukraine when it comes to future PSA’s.
However, it is the authors belief, that this was the right move, as a wider group of actors are needed on the Ukrainian shelf in order to create a more efficient exploration for the resources offshore Ukraine.
The Black Sea has revealed lots of potential for hydrocarbons and the right strategy for exploration as well as production sharing is needed in order for the resources to be exploited as efficient as possible and at the same time take care of the Ukrainian national needs for energy.
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