LVIV - The Lviv Regional Council Commission on the Environment and Natural Resources has not given state oil and gas company Naftogaz Ukrainy permission for industrial development of 10 oil and gas fields.
The decision was made at an extended commission session on Thursday, during which 8 out of 12 members voted against giving approval and three abstained, an Interfax correspondent reported.
Earlier the company had asked the regional council to give its approval to industrial development and further oil and gas production at the Vasylenkivska, Burshtynska, Viktorivska, Haichynska, Dnistrovoska, Leonivska, Martivska, Mishunivska, Rava-Rusko-Krekhivska and Chumatska sites.
Commission members said at the meeting that approval would not be given because Naftogaz Ukrainy is not meeting the commitments it undertook in its cooperation agreement with Lviv region.
"Naftogaz implemented under 10% of the cooperation agreement for 2011 – of the Hr 75 million envisaged in the agreement, only 7 million was spent developing the region," Commission Chairman Irina Seh said.
District board chiefs attending the session asked the regional council not to give permission for new fields because the company was not meeting its contractual obligations.
They said gas was being produced with violations to safety regulations and Naftogaz subsidiaries had started re-registering their legal addresses outside Lviv region, so local budgets were losing out on income tax, which makes up the lion’s share of district and rural budgets.
After lengthy debate the commission decided to tell Naftogaz Ukrainy that it was ready for further cooperation but on the condition that the terms of the framework agreement were implemented.
Deputies will also ask for subsidiaries to be registered at their actual place of work and will draw up a new agreement for 2012.
The deputies will discuss that at the next regional council session.
