The owner of the upstream natural gas holding Zahidnadraservis has told where his companies produce gas and who funds them. And about the obstacles of increasing production.

About the industry:

– Does Ukraine have lots of skeptics regarding the Government's plans of 27 bcm of production by 2020? In your point of view, are these plans plausible?

The plans are quite plausible provided certain measures are implemented immediately. Firstly, the investment climate in the industry should be improved. The tax burden and royalty payments in the industry are too high for its development. They do not stimulate the investors to take on the risks.
I am looking at it from a small company's perspective: if we can open gas fields on our own, this indicates big perspectives. If earlier, instead of purchasing gas from Gazprom, we invested heavily in our own production, we would have achieved much more long ago. We would have achieved energy independence, about which we only started talking now.

– In your opinion, what can be done at first?

The royalty cut from 29% to 12% at least for the new wells from 2017 will enliven the market. Otherwise, it is hard to expect significant growth of production.
For us it is important to simplify the issue of permits for access to land for appraisal works. The land allocation procedure should be simplified radically and outlined in detail: for drilling, for gas pipeline and for infrastructure.
The procedure of connecting to major pipelines should also be simplified. Currently, it is complicated and is not directed at speeding up the connection process, which in turn should speed up the growth of production.

Full text of the interview (in Russian) is available at: