Ukraine Upstream Fiscal and Regulatory Report 2019 - Improved Fiscal Terms but Possible Political Risks - ResearchAndMarkets.com
The "Ukraine
Upstream Fiscal and Regulatory Report - Improved Fiscal Terms but
Possible Political Risks" report has been added to ResearchAndMarkets.com's
offering.
"Ukraine Upstream Fiscal and Regulatory Report - Improved Fiscal Terms
but Possible Political Risks", presents the essential information
relating to the terms which govern investment into Ukraine's upstream
oil and gas sector. The report sets out in detail the contractual
framework under which firms must operate in the industry, clearly
defining factors affecting profitability and quantifying the state's
take from hydrocarbon production. Considering political, economic and
industry specific variables, the report also analyses future trends for
Ukraine's upstream oil and gas investment climate.
Ukraine is organizing a series of licensing rounds for 2019 with the
goal of increasing its gas production, but the political risks linked to
the imminent presidential elections raise the possibility of further
fiscal and regulatory changes and may reduce the attractiveness for
international oil companies.
Based on analysis of Ukraine's 2019 three online concession tenders and
PSA tender, through which the country is offering in total 42 onshore
blocks (20,000 sq. km). The first online concession tender was concluded
on March 6 with the assignment of three blocks to
Neftegazopromyshlennaya Geology LLC (Burisma Group), DTEK Naftogaz, and
Ukrgazdobycha.
As a result of low natural gas royalty rates, fixed at 12% and 6% for
new gas wells at reservoir depth of less than and more than 5,000 meters
respectively, Ukraine's gas fiscal framework is competitive at a
regional level. However, no international oil company is among the
winners of the first concession tender at a time when Ukraine needs
capital and technology to develop its hydrocarbons sector.
Ukraine has modified its petroleum fiscal framework several times over
the last 10 years and that, as a result of economic and political
reasons, it is possible that it may change again in the coming years.
The current government has promised that the existing royalty structure
will be stable until 2023, but the March 2019 presidential elections add
risk. President Petro Poroshenko, who has pursued an investor-friendly
approach to the hydrocarbons sector, faces strong competition from
former Prime Minister Yulia Tymoshenko and the anti-elite presidential
candidate, comedian Volodymyr Zelensky.
Election polls suggest that no candidate will win the presidency on the
first ballot and the overall result remains difficult to predict. The
continuity of policy in the oil and gas sector is, therefore, far from
clear as it is uncertain whether the next president will implement a
liberalization agenda as suggested by the International Monetary Fund or
introduce a populist agenda centered on reducing utility prices for
households and increasing public spending.
Scope
-
Overview of current fiscal terms governing upstream oil and gas
operations in Ukraine
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Assessment of the current fiscal regime's state take and
attractiveness to investors
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Charts illustrating the regime structure, and legal and institutional
frameworks
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Detail on legal framework and governing bodies administering the
industry
-
Levels of upfront payments and taxation applicable to oil and gas
production
-
Information on application of fiscal and regulatory terms to specific
licenses
-
Outlook on future of fiscal and regulatory terms in Ukraine.
Reasons to Buy
-
Understand the complex regulations and contractual requirements
applicable to Ukraine's upstream oil and gas sector
-
Evaluate factors determining profit levels in the industry
-
Identify potential regulatory issues facing investors in the country's
upstream sector
-
Utilize considered insight on future trends to inform decision-making.
Key Topics Covered:
1 Table of Contents
1.1. List of Tables
1.2. List of Figures
2. Regime Overview
3. State Take Assessment
4. Key Fiscal Terms - Royalty/Tax
4.1. Subsoil Use Fees (2013 onward)
4.1.1. Commodity Valuation (P)
4.1.2. Subsoil Use Fee Rates
4.1.3. Adjustment Coefficient (A))
4.1.4. Reduced Rate (Only for Companies With at Least 25% State
Ownership)
4.2. Pre-2013 Regime
4.2.1. Rental (Royalty) (Abolished December 31, 2012)
4.2.2. Subsoil Tax
4.2.3. Geological Tax (Abolished December 31, 2010)
4.3. Gas Export Duty
4.4. Direct Taxation
4.4.1. Corporate Income Tax (CIT)
4.4.2. Deductions and Depreciation
4.4.3. Withholding Tax
4.5. Indirect Taxation
4.5.1. Value-Added Tax
4.5.2. Unified Social Contribution
5. Key Fiscal Terms - Production Sharing Agreements
5.1. Upfront Payments
5.1.1. Bonuses and Fees
5.1.2. Subsoil Use Fees
5.2. Cost Recovery
5.2.1. Limit on Recovery
5.2.2. Recoverable Costs
5.3. Profit-Sharing
5.3.1. Export Duty
5.4. Direct Taxation
5.4.1. Corporate Income Tax (CIT)
5.4.2. Fiscal Stability
5.5. Indirect Taxation
5.5.1. Value-Added Tax
5.5.2. Customs Duties
5.6. State Participation
6. Regulation and Licensing
6.1. Legal Framework
6.1.1. Governing Law
6.1.2. Contract Type
6.1.3. Title to Hydrocarbons
6.2. Institutional Framework
6.2.1. Licensing Authority
6.2.2. Regulatory Agency
6.2.3. National Oil Company
6.3. Licensing Process
6.3.1. Auctions for Special Permits
6.3.2. Direct Award of Special Permits
6.3.3. Award via PSA Tender
6.4. License Terms
6.4.1. Duration
6.4.2. Work Obligations
6.4.3. Domestic Market Obligations
6.4.4. Local Content
7. Outlook
8. Appendix
For more information about this report visit https://www.researchandmarkets.com/r/3biibv
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