EY acted as advisor to Oil and Gas Exploitation LLC, a DTEK Oil & Gas Group company, in connection with the preparation and signing of the hydrocarbons sharing agreement for the Zinkivska block.
The production sharing agreement (PSA) is a complex mechanism with special features of its regulation. EY has unique experience of working on the first ever PSA in Ukraine in 2006-2007 and on such other agreements that have been implemented in our country over the next years. EY specialists stood at the origins of PSAs in Ukraine and were actively involved in the development of the legal framework for the proper functioning of these agreements.
In 2019, tenders for nine PSA for hydrocarbon production in Ukraine were held. DTEK Oil & Gas Group companies, which won the tender for the Zinkivska block, engaged EY as counsel for the agreement drafting and its signing with the State of Ukraine. EY started the work on the project in August 2019, and one year and a half later on 31 December 2020 the agreement was signed.
The multi-disciplinary team of EY professionals from different practices was involved in the agreement preparation process. The project team was led by Albert Sych, Partner, Law, and included Larysa Marchenko, Partner, Strategy and Transactions, Iryna Kovalenko, Andrii Pryimak and Olena Dreval, Senior Associates, Olga Ivanchuk, Manager, and Ihor Savchuk, Liliia Bernatska and Bogdan Syniak, Associates.
EY project team also advised on the structuring of the agreement and worked on the development of PSA legislation.
«We are grateful to our client, a DTEK Oil & Gas Group company, the leader and the largest private investor in Ukraine’s energy sector, for the trust and fruitful cooperation.
We are glad that our unique experience has been useful for the largest PSA tender in Ukraine, and it is an honor to have acted as advisor on several agreements in this tender round.
We are pleased to have witnessed the state authorities approach the agreements’ preparation and execution in a new and more efficient manner. We are happy that Ukraine has been able to bring this significant project to successful fruition.
One and a half years of hard work have ended up with success. We hope for a fast transition to the implementation and successful results of further production”, — commented Albert Sych, Partner, Law.
The signing of production sharing agreements creates a positive signal for investors and fosters gas production in Ukraine. Furthermore, it is an important step towards strengthening Ukraine's energy independence. It is expected that the total amount of investments under the PSAs could reach as high as USD 1 billion.
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About DTEK Naftogaz Group
DTEK Oil & Gas is the largest private oil and gas company in Ukraine. DTEK Oil & Gas produced 1.66billion cubic meters of natural gas in 2019, breaking the record both for the company and for private gas production sector of Ukraine.
DTEK Oil & Gas includes Naftogazvydobuvannya and Naftogazrozrobka– companies that explore and extract hydrocarbons in Poltava and Kharkiv regions.
