On July 19, 2017, the Association of Gas Producers of Ukraine (AGPU) jointly with the American Chamber of Commerce in Ukraine (the Chamber) during the round table Government's Plan for gas production by 2020 – a Myth or Reality, which was held with the participation of the representatives of the authorities, MPs and the public, has initiated the public discussion of the current state of the gas production industry, and further steps on the way to achieving the Government's goal of increasing gas production to 27 bcm by 2020.

During the discussion, the Chamber has presented the three main blocks of issues, effective resolving of which will improve the situation in the petroleum industry and will lead to international approval of Ukraine as an attractive country for the petroleum industry. Among them are: hydrocarbons production tax reform, practical implementation of the Law on the natural gas market, and regulatory reform. Regarding the last one: The Chamber has created an initiative group, and has started working on the new Subsoil Code, which should make the licensing procedure transparent and eliminate any contradictions with the current legislation.

The Association has in turn initiated a public discussion of the Roadmap for the petroleum industry. In particular, the three main directions were specified for the strategic initiatives: the tax policy, subsoil use rules, and regulatory policy. Efficient addressing of these matters will improve the situation in the gas production industry and will allow to fulfill the Government's plan on increasing domestic natural gas production to 27 bcm by 2020.

The tax policy topic includes justification of implementing a 12% royalty now, and transition to the additional income tax in the middle-term time frame. It is the average European level of tax, which will allow to stay competitive on the international capital market. Such level of tax is currenly acceptable for launching new projects in Ukraine. Additionally, the Association is arguing for breaking down the royalty into two parts: 10% should go to the state budget, and 2% – directly to the local budgets. Without this, it is currently impossible to effectively negotiate land issues, licensing and other matters with the local authorities.

The subsoil use topic includes development of the resources access reform, simplification of land plots issue and normalization of the wells status, deregulation of the permitting procedures, update and codifying of the legislation in the subsoil use area.

The regulatory policy includes harmonization of the secondary legislation on the gas market, decrease the security stock of natural gas, normalization of the export activities, and competition protection on the gas market.