The Ukrainian government has repeatedly claimed it is doing its best to improve the oil and gas investment climate, but official statements are the opposite of the reality, as Prime Minister Arseniy Yatsenyuk is leading the great deception.
According to Prime Minister Yatseniuk, Ukraine has taken a number of important steps to reform the energy sector, and has even achieved success in the formidable fight against rampant corruption, as well as signed open and transparent contracts for purchase of the natural gas from EU member states. Now he claims Ukraine is looking forward to Western companies' investment in Ukraine's gas transportation system.
"I would like to point out where we have succeeded: we have succeeded in overcoming corruption in the energy sector. Billions of dollars, which previously used to flow into the pockets of Ukrainian oligarchs, are now being brought out of the shadows. At present, Ukraine purchases gas under transparent and open contracts with European companies," Yatseniuk recently told a joint press conference with German Chancellor Angela Merkel in Berlin.
Even the President has made misguided and naïve statements this past week in Davos, declaring that “…Ukraine will build new ways for receiving Norwegian gas and gas from Europe, and Ukraine will also produce shale gas."
The stark reality is that these official statements are in no way reflected by government action, and the gas market players in Ukraine recognize the deception as does the energy industry as a whole.
The real story is that while gas has been received from Norway in reverse flows, Ukraine’s current energy strategy, taxation and fiscal regime has forced Ukraine’s current producers of oil and gas to stop drilling new wells and curtail production.
The development of Ukraine’s potential shale gas is even further afield with Chevron announcing its departure from Ukraine and only Cub Energy remaining in the country as an operator with both technical and local expertise in developing the shale. Even if shale can be developed in Ukraine it will be extremely challenging given the highly service-oriented logistical train, which does not presently exist in Ukraine.
In the course of the last year the Ukraine’s private gas producers were doing their best to overcome, if not merely survive, the consequences of the government’s move to significantly increase fiscal and administrative pressure on the industry without any consultations with the latter. The government failed to deliver on its promises, and the only thing it managed to achieve was an undermining of any trust the industry may have had in it.
Ukraine’s current regulatory and fiscal systems governing the energy sector are overly complicated and non-transparent, even without the major political and military conflict with Russia and annexation of the Crimea. The implications have been significant. Since last year, all major oil and gas projects in Ukraine have significantly slowed down at best, and been suspended entirely at worst.
Issue by issue, the lies continue to mount.
Complete story at - Lies And Deception In Ukraine’s Energy Sector | Zero Hedge
According to Prime Minister Yatseniuk, Ukraine has taken a number of important steps to reform the energy sector, and has even achieved success in the formidable fight against rampant corruption, as well as signed open and transparent contracts for purchase of the natural gas from EU member states. Now he claims Ukraine is looking forward to Western companies' investment in Ukraine's gas transportation system.
"I would like to point out where we have succeeded: we have succeeded in overcoming corruption in the energy sector. Billions of dollars, which previously used to flow into the pockets of Ukrainian oligarchs, are now being brought out of the shadows. At present, Ukraine purchases gas under transparent and open contracts with European companies," Yatseniuk recently told a joint press conference with German Chancellor Angela Merkel in Berlin.
Even the President has made misguided and naïve statements this past week in Davos, declaring that “…Ukraine will build new ways for receiving Norwegian gas and gas from Europe, and Ukraine will also produce shale gas."
The stark reality is that these official statements are in no way reflected by government action, and the gas market players in Ukraine recognize the deception as does the energy industry as a whole.
The real story is that while gas has been received from Norway in reverse flows, Ukraine’s current energy strategy, taxation and fiscal regime has forced Ukraine’s current producers of oil and gas to stop drilling new wells and curtail production.
The development of Ukraine’s potential shale gas is even further afield with Chevron announcing its departure from Ukraine and only Cub Energy remaining in the country as an operator with both technical and local expertise in developing the shale. Even if shale can be developed in Ukraine it will be extremely challenging given the highly service-oriented logistical train, which does not presently exist in Ukraine.
In the course of the last year the Ukraine’s private gas producers were doing their best to overcome, if not merely survive, the consequences of the government’s move to significantly increase fiscal and administrative pressure on the industry without any consultations with the latter. The government failed to deliver on its promises, and the only thing it managed to achieve was an undermining of any trust the industry may have had in it.
Ukraine’s current regulatory and fiscal systems governing the energy sector are overly complicated and non-transparent, even without the major political and military conflict with Russia and annexation of the Crimea. The implications have been significant. Since last year, all major oil and gas projects in Ukraine have significantly slowed down at best, and been suspended entirely at worst.
Issue by issue, the lies continue to mount.
Complete story at - Lies And Deception In Ukraine’s Energy Sector | Zero Hedge
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