Submitted by James Stafford via OilPrice.com,
Independent gas producers in Ukraine are joining forces to pressure the government in Kiev to re-think its new gas tax before everyone makes a run for the border in search of new assets in a more stable environment.
Private producers have compiled a draft letter to Ukrainian Prime Minister Arseniy Yatsenyuk, criticizing the government’s doubling of taxes for gas producers, which was justified through the use of “wrong and misleading” data about private companies.
They also warn that their time in Ukraine will be over if the tax is extended beyond the end of this year - and there will be no further foreign investment in the country’s beleaguered gas sector.
In an open letter to Yatsenyuk--an advance copy of which was obtained by Oilprice.com on August 10--independent gas producers in Ukraine pointed out that the cost of gas production by private companies in Ukraine exceeds the capital costs of public companies, which enjoy the advantage of development well researched and more easily profitable areas. “Therefore, any estimates by the Ministry of Finance as to the cost of gas on the basis of the financial performance of public companies cannot be used to determine the profitability of private company projects, which may be 10 times higher,” the letter said.
What the Ukrainian Ministry of Finance seems to view as the extraordinary windfall of profits enjoyed by private companies is unrealistic at best, said the letter, which was signed by private producers Cub Energy, Geo Alliance, Burisma, Kub Gas, and Regal Petroleum.
Complete story at - New Tax Threatens To Destroy Gas Production In Ukraine | Zero Hedge
Independent gas producers in Ukraine are joining forces to pressure the government in Kiev to re-think its new gas tax before everyone makes a run for the border in search of new assets in a more stable environment.
Private producers have compiled a draft letter to Ukrainian Prime Minister Arseniy Yatsenyuk, criticizing the government’s doubling of taxes for gas producers, which was justified through the use of “wrong and misleading” data about private companies.
They also warn that their time in Ukraine will be over if the tax is extended beyond the end of this year - and there will be no further foreign investment in the country’s beleaguered gas sector.
In an open letter to Yatsenyuk--an advance copy of which was obtained by Oilprice.com on August 10--independent gas producers in Ukraine pointed out that the cost of gas production by private companies in Ukraine exceeds the capital costs of public companies, which enjoy the advantage of development well researched and more easily profitable areas. “Therefore, any estimates by the Ministry of Finance as to the cost of gas on the basis of the financial performance of public companies cannot be used to determine the profitability of private company projects, which may be 10 times higher,” the letter said.
What the Ukrainian Ministry of Finance seems to view as the extraordinary windfall of profits enjoyed by private companies is unrealistic at best, said the letter, which was signed by private producers Cub Energy, Geo Alliance, Burisma, Kub Gas, and Regal Petroleum.
Complete story at - New Tax Threatens To Destroy Gas Production In Ukraine | Zero Hedge
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