EY acted as advisor to Ukrainian Energy L.L.C., a project company established by Aspect Energy and SigmaBleyzer, in connection with the preparation and signing of the hydrocarbons sharing agreement for 50 years for the Varvynska block comprising approximately 3,500 km2.
Ukrainian Energy won the tender and engaged EY as counsel for the agreement drafting and its signing with the State of Ukraine. The work on the project started in August 2019, and on 13 January 2021 the agreement was signed.
The multi-disciplinary EY team provided tax, legal and financial advisory support and advised on transaction structuring. The project team was led by Albert Sych, Partner, Law, and included Larysa Marchenko, Partner, Strategy and Transactions, Iryna Kovalenko, Andrii Pryimak, Olena Dreval, Senior Associates, Olga Ivanchuk, Manager, Ihor Savchuk, Liliia Bernatska and Bogdan Syniak, Associates.
“We are grateful to our client for the trust and productive cooperation, and we are happy that one and a half years of hard work have come to their successful fruition. We hope for a quick transition to the implementation of the agreement, which, obviously, will require considerable efforts, and, most importantly, for successful results of further production.
I am pleased to see this significant private investment from the US into the Ukrainian oil and gas sector, the first under the terms of production sharing agreements since 2014. This should give a positive signal for similar projects in the future.
Production sharing agreements have become close to me and EY Ukraine, professionally and even personally. Having worked on the PSA in Ukraine back in 2006, then having supported such significant agreements in 2012-2014 and then working on several PSAs in 2019-2021, I am glad that Ukraine has managed to successfully conclude this large-scale tender round for production sharing agreements,” — commented Albert Sych, Partner, Law.
“Thanks very much to the EY team. You worked around the clock and even from the hospital to make sure that we stayed on track. We are truly thankful for your hard work and friendship.” – commented Shawn Canaday, Chief Financial Officer of Aspect Energy.
In 2019, tenders for nine PSAs for hydrocarbons in Ukraine were held. On 31 December 2020 production sharing agreements were signed for seven blocks: Sofiivska, Uhnivska, Balakliyska, Ivanivska, Zinkivska, Buzivska, Berestyanska. Ukrainian Energy’s agreement on the Varvynska block became the eighth signed by Ukraine. We are pleased to remind that EY acted as advisor on several agreements in this tender round, in particular, EY advised a DTEK Oil & Gas Group company, on the PSA for the Zinkivska block.
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About Aspect Energy and SigmaBleyzer
Aspect Energy is an independent exploration and energy investment company with offices in Houston, Texas, Denver, Colorado, and Budapest, Hungary. Aspect Energy engages in exploration, production, investment, and development activities in North America and Europe.
SigmaBleyzer is a Houston, Texas-based private equity firm and is one of the most experienced investors in Ukraine. Over the past 25 years, SigmaBleyzer has raised and invested approximately USD1 billion in over 100 companies in a variety of industry sectors and has implemented more than 90 exits.