Enwell Energy initiated arbitration against Ukraine over the suspension of production

Enwell Energy, part of Smart Energy Group, announced the initiation of arbitration proceedings against Ukraine over the suspension of hydrocarbon production licenses at three fields, according to the company’s statement.

The company has invoked investor protection mechanisms under the Agreement between the Government of the United Kingdom and the Government of Ukraine on the Promotion and Reciprocal Protection of Investments. The case has been registered with the International Centre for Settlement of Investment Disputes (ICSID).

According to the company, Ukraine’s actions since December 2022, including interference in the registration of property rights, blocking of assets, searches at local offices and production sites, as well as the suspension of gas and condensate production licenses, grossly violated its rights guaranteed under the agreement. The case concerns the suspension of production licenses at the Vasyschivske and Svystunivsko-Chervonolutske fields from May 4, 2023, to June 26, 2024, as well as further suspensions of licenses at the Mekhedivsko-Golotovshchynske, Svyrydivske, and Vasyschivske fields from November 15, 2024.

Enwell Energy stated that attempts to resolve the dispute amicably, including through procedures provided for in the agreement, proved unsuccessful. Therefore, within the framework of the arbitration, the company seeks compensation for damages, reinstatement of its licenses for the remainder of their terms, and coverage of costs related to the process.

According to ExPro, Smart Energy Group is currently producing about 1.8 mcm of natural gas per month, more than four times less than in 2024. The operation of special permits for hydrocarbon production held by the Group’s companies was suspended on November 15, 2024, by order of the Ukrainian Geological Survey in execution of the NSDC decision on the imposition of sanctions against the Group’s beneficiaries.