On March 3-5, 2015, Burisma Holdings, the largest independent gas producer in Ukraine took part in the Ukrainian Energy Forum dedicated to “Ensuring energy security in Ukraine through diversification of supplies and increase in domestic production.”
For the 6th time, the Annual Energy Forum sponsored by the Adam Smith Institute brought together top management of Ukrainian oil and gas companies, government officials and regulators. This year the focus the event’s focus was on reverse-flow supplies from EU, infrastructure management reforms, natural gas storage, the PSA update and expected new license areas, progress in the commercial viability of conventional hydrocarbon resources, temporary tax code and its repercussions for gas companies’ investment plans.
Ukrainian Energy Forum is the largest expert and discussion platform in the oil and gas sphere in the country free of corporate and political influence. More than 300 representatives of Ukrainian and international business, international experts, politicians and media attended the event.
“Today, Ukrainian oil and gas sector is experiencing hard times. However, this particular time calls for new ideas and approaches to ensure future foreign investments, – says Chief Financial Officer at Burisma Holdings Alexander Gorbunenko. – In the meantime, the state does little to nothing to implement the energy independence program. In fact, newly enacted fiscal legislation offsets the investment component of the industry. During the last three years, operating companies of Burisma Holdings Group tripled natural gas production investing UAH 2 billion in 2014 alone. According to further development plans, approved by the Board of Directors in May last year, the company is planning to invest around USD 3 billion and produce 1 billion cubic meters of natural gas. Sly extension of “temporary” rent rates on the basis of permanent ones, and even the loss of a reduction factor to stimulate new drilling wells reflected in amendments to the tax legislation impeded development programs and led to the collapse of the investment program of our company as well as key players in the domestic market”.
Amid weakening investment activities of the largest global gas producers caused by a significant drop in energy prices, the new tax system could lead to the collapse of entire Ukrainian oil and gas industry, leaving it to face its problems alone. According to Alexander Gorbunenko, Ukraine has to review the fiscal legislation in order to maximize the “warming” of the investment climate, making it most attractive in the region – non-discriminatory and stimulating. “This is not just well-timed, but critically important to preserve the independence of Ukraine.
As the largest private gas company, Burisma Holdings strives to make Ukraine less dependent on natural gas imports funded from the National Bank reserves. In the end,, this creates additional barriers for an ongoing economic development and triggers devaluation of national currency. Our goal is to ensure energy security, create a basis for rapid economic development and to save national gas production through dialogue with state agencies representatives “- adds Chief Financial Officer at Burisma Holdings Alexander Gorbunenko.
Technologies and investments are the core instruments to solve the number one task for our country – energy independence of Ukraine. Burisma Holdings, as the largest private gas producer, is working closely with American and European partners in order to attract the best international practices in the gas producing industry. To ensure active development of Ukrainian gas production sector, investor confidence should be the main asset of public policy.
About the Company:
Burisma Holdings – the largest independent gas producer in Ukraine, founded in 2002. Holding comprises four operating companies that are engaged in mining and production of hydrocarbons – Energy service company “Esko-Pivnich”, “Pari”, “First Ukrainian Petroleum Company” and “Aldea”. In 2014, total natural gas production was 692 million cubic meters. m, is 50.4% more than in the 2013th. Burisma Holdings owns 20 licenses for hydrocarbon production in the major oil and gas basins of Ukraine. The entire volume of production is sold to the domestic market of Ukraine. #EnergySecurityUkraine
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