Statement of the American Chamber of Commerce in Ukraine on Production Sharing Agreements (PSAs) in the Upstream Oil and Gas Sector
The American Chamber of Commerce in Ukraine welcomes the recent initiatives introducing more transparent processes for bidding for oil and gas blocks. It is important that Ukraine works to achieve a thriving upstream sector governed by a fiscal and regulatory regime based on world best practices.
Member Companies of the American Chamber of Commerce in Ukraine are concerned about the introduction of the PSA mechanism in addition to the license/royalty regime which continues to run in parallel. PSAs are not used in any EU country, and their use in Ukraine only underlines the urgent need for reforms in the existing oil and gas fiscal and regulatory regime. The criteria discriminating PSA and other blocks are unclear. The current PSA process is seriously flawed. A single, fair, stable and non-discriminatory environment for oil and gas is one of the key factors in attracting major international investment.
The American Chamber of Commerce in Ukraine looks forward to working with the government and members of the international community to offer ways to address shortcomings in the current PSA process and to create an environment that sparks a resurgence of interest in the sector and allows Ukraine to achieve its objectives including self-sufficiency in gas.