Statement and Recommendations of the American Chamber of Commerce in Ukraine regarding Product Sharing Agreements’ (PSAs) Processes

The American Chamber of Commerce in Ukraine strives to assist Ukraine’s Government in retaining and attracting investments in the country’s energy sector.

There have been certain recent developments with respect to PSAs in Ukraine. Taking into consideration that PSAs are seen by investors as a most reliable and attractive instrument to invest into risky exploration and production of hydrocarbons in Ukraine, the Chamber recommends that serious consideration is given to the following requirements to make the PSAs processes transparent and effective:

1. Adoption of a transparent tendering process that includes clear prequalification of participants.

2. In respect of each participant and/or its ultimate parent company, the prequalification criteria must take into account:

   - international reputation;

   - oil & gas experience;

   - technical & financial capability;  

   - robustness of financial statement.

3. Disclosure of all participants admitted to tender.

4. Simultaneous disclosure, for all those admitted to the tender, of identical information packages containing all available technical data related to the prospective bid.

If Ukraine is determined to attract international oil & gas investors able and willing to invest in oil & gas industry, to discover and produce reserves as early as possible, in a safe, environmentally correct and economical manner, it is inescapable that Ukraine must offer impeccably transparent tendering processes as well as economically attractive and stable conditions, guaranteeing such stability.

The Chamber and its Members do hope that responsible state authorities, the Government, and the Parliament of Ukraine concur with the above and endorse these basic conditions and do their utmost to enshrine them with no delay in legislation.