What foreign companies need in order to invest in Ukrainian hydrocarbon production
Source：Ukraine Business News
From：Taiwan Trade Center, Kyiv
Update Time：2024/01/04
According to Oleksandr Katsuba, the owner of Alfa Gas, there is a growing interest in the Ukrainian oil and gas market from international companies, particularly from Italy, the United Kingdom, and the Middle East. This interest is a positive sign for Ukraine's energy sector, which has the potential to attract significant foreign investment. However, Katsuba notes that these investors are looking for stability and predictability in the market's regulatory environment, as well as incentives to make their investments more viable.
In addition, after the war’s end, the market needs a delicate balance between the state’s need to generate revenue through taxes and the necessity to offer incentives that encourage the expansion of production. For investors to invest in the industry, it is necessary to stimulate the drilling of new deep and ultra-deep wells. This, according to Katsuba, requires significant tax incentives to offset the high costs and risks associated with such projects.
“I would also intensify work on concluding production sharing agreements (PSAs) with potential investors. This will increase production in the west of the country and then in the east and south,” says Katsuba. These agreements, which allow for the sharing of production between the state and the investor, could be a game-changer for increasing production, particularly in the western regions of Ukraine and eventually in the eastern and southern parts of the country. The successful implementation of PSAs could lead to a more diversified and robust energy sector in Ukraine.
Furthermore, Katsuba highlights the crucial role of local authorities in this process. He advocates for a change in perspective where investors are seen not as sources of personal enrichment but as partners contributing to the country's and the community's development. For this partnership to be effective and long-lasting, any new agreements or policies should have a minimum duration of 5-10 years. This long-term approach would provide the stability and predictability that investors seek and would be instrumental in the sustainable development of Ukraine's oil and gas sector.
Source: https://ubn.news/what-foreign-companies-need-in-order-to-invest-in-ukrainian-hydrocarbon-production/