04 April 2016, 17:46
The issue of energy-dependence of Ukraine, first of all in the gas sector, is a factor of the national security, economic growth and social stability.
Respective issue was discussed within the framework of the roundtable on reformation of the national gas producing industry organized by the Verkhovna Rada Committee on Fuel and Energy Complex, Nuclear Policy and Nuclear Safety with the assistance of the Embassy of Britain to Ukraine on April 1, 2016.
People's deputies, specialists from relevant ministries and institutions, public experts, journalists discussed the reforms aimed at boosting own gas production, formation of investment attractiveness and stable development of the sector.
Current situation in the sector demands urgent reforms as in absence of any global sector-oriented strategy of subsoil use, first of all in holding geological surveys, absence of mechanisms of protection of investors' interests, non-transparency of auctions, etc. led to considerable economic and reputation losses and continue to slow down the development of the sector.
First Deputy Chairperson of the Verkhovna Rada Committee on Fuel and Energy Complex, Nuclear Policy and Nuclear Safety Oleksandr Dombrovskyi noted strategic priorities for the colleagues and participants in the roundtable:
- We have a joint goal — we want Ukraine to become an energy independent state. Unfortunately, historically we have improperly used energy resources we have. Thus, we have to raise the level of energy efficiency and raise the extraction of own energy resources, first of all — natural gas.
The parliamentarians also noted a number of problems in the gas production sector:
- Increase of rents for extraction of natural gas affected the sector. Besides, Ukraine lost enormous energy resources in view of the Crimea's annexation: only in 2014 the losses from termination of economic activity of the Chornomornaftohaz state joint-stock company [Crimea] made up UAH 13.8 billion, and the cost of lost assets makes up about UAH 15.7 billion. At present out Committee does its best to move forward. According to him, the relevant Committee is holding open and professional work in that direction in the walls of the Ukrainian Parliament and no important draft law is considered there.
The participants in the roundtable noted that a serious barriers on the way to the development of the sector is also the difficulties in cooperation with local authorities: the works have not been launched on about 1,500 of 5,462 sites for which special licenses were assigned; eight regions have not satisfied any submitted application; 40% of projects are considered to be frozen due to land issues; 72% of applications have not received approval of regional councils.
In the second section of the roundtable, board chairperson of the Ukrgasvydobuvannya public joint-stock company Oleh Prokhorenko and first deputy board chairperson / executive director of Ukrgasvydobuvannya Oleksandr Romaniuk presented "Strategy of Ukrgasvydobuvannya's Development 20/20. Problems and Ways of Implementation." According to Prokhorenko, Ukraine has a huge potential showing that by 2020 the country will easily be able to produce up to 20 billion cubic meters of hydrocarbons a year, which added to the volumes of production by private extracting companies will ensure about 90% of the country's needs. "We have a good plan and respective resources. The only thing we need is the political will to changes. Our reformation plan envisions transformation of Ukrgasvydobuvannya into a modern competitive and investment-attractive energy business. Instead, using the times of the political crisis, corrupt officials, we had ousted from their office for annual embezzlement of about UAH 2-3 billion from the company, have intensified their attempts to have a revenge. Ukrgasvydobuvannya is a collateral damage in political bargain. However, the losses of the society will be much higher than the benefits of the corrupt officials, as it is about the loss of the economic sovereignty and a return under dependence on Gazprom," he said.
The roundtable organizers plan to hold a number of expert discussions on reformation of the fuel and energy sector of Ukraine and provision of its effective development and growth.