The Cabinet of Ministers transferred oil and gas offshore areas to Naftogaz

Today, at a meeting of the Cabinet of Ministers of Ukraine, a resolution to grant the geologic exploration permit for the Dolphin area on the Black Sea shelf to Naftogaz of Ukraine NJSC without an auction has been made.

For this, the Cabinet of Ministers amended resolution No. 615, Paragraph 8, which stipulates that only Naftogaz of Ukraine NJSC or its subsidiary (100%) can apply for a special permit without an auction. The validity period of the special permit is 30 years. The cost of the special permit (fee) is equal to 10% of the initial price at sea depths up to 100 m, and 1% at depths exceeding 100 m.

Naftogaz noted that investments in the first operational year will amount to USD 40 million. The Company has been negotiating with potential contractors for a year now and has now formed a Shortlist. Also, it is worth noting that according to Andriy Kobolyev, the scope of work will depend on the activity of the Russian Navy.

Recall that in March 2019, the Cabinet of Ministers announced a tender for the right to produce hydrocarbons on the Dolphin area under the production sharing agreement (PSA). Then 4 companies bidded in the tender, including Caspian Drilling International, Frontera, Trident BlackSea, and the Ukrainian Ukrnaftoburinnya PC PJSC. However, the Cabinet of Ministers cancelled the tender in August 2019.