You're reading: Tymoshenko alarmed at upcoming deal between Ukraine, Vanco Prykerchenska

Leader of the Batkivschyna Party and former Prime Minister Yulia Tymoshenko has said that the possible signing of an agreement between the Government of Ukraine and Vanco Prykerchenska about the extraction of oil and gas on the Black Sea shelf represents a betrayal of national interests.

"I think we have a few weeks left. They plan to sign the agreement and hand over the strategic territory of Ukraine in the coming weeks," she said, when asked when the final agreement between Ukraine and Vanco Prykerchenska on the development of the Black Sea shelf might be reached.

According to Tymoshenko, the plans to renew the agreement threaten the key national interests of Ukraine.

"Ukraine’s strategic reserves are being given over to Ukrainian business magnates, on such conditions that Ukraine will not receive a kopeck, not a cubic meter of gas for them.

The current developments will deprive Ukraine of its strategic reserve of oil and gas for hundreds of years ahead," she said.

As reported, First Deputy Prime Minister Andriy Kliuyev announced on Feb. 2 that the Ukrainian government intended to sign an amicable agreement with Vanco Prykerchenska Ltd in February.

Kliuyev said that the agreement does not envisage penalties against the state in the case of the cancellation of the document.

Vanco International, which is 100% owned by Vanco Energy Company (United States) won a Ukrainian government tender for the right to enter into production sharing agreements (PSAs) for extraction at the Prykerchensky field of the Black Sea continental shelf in April 2006.

It took more than a year to agree a draft PSA, which was finally adopted by the government in October 2007 and signed in the presence of the former President Viktor Yuschenko.

The Environment Ministry of Ukraine in December 2007 issued a license to Vanco Prykerchenska for geological prospecting, research and the commercial production of oil, gas and gas condensate at the Prykerchensky field.

Later, the ministry found that a number of violations of Ukrainian laws were committed during the tender and when the license was issued to Vanco Prykerchenska, and there was evidence of infringements by Vanco International of some PSA clauses.

In April and May 2008, the government cancelled the license of Vanco Prykerchenska and withdrew from the PSA. Vanco went to international arbitration, simultaneously offering the renewal of cooperation under the PSA to the government of Ukraine.

Vanco Prykerchenska is owned in equal shares by Vanco International, DTEK Holdings Limited of Ukrainian businessman Rinat Akhmetov, Shadowlight Investments Limited of Russian businessman Yevgeniy Novitsky, as well as Integrum Technologies Limited.