If royalties for private companies producing gas are set at 28% and 55%, gas extraction in Ukraine will fall and the country will need additional imports of 1 billion cubic meters of gas in 2015, said Roman Opimakh, reform coordinator for the oil and gas industry at the Ukrainian president’s Economic Reform Center.
“The calculations show that if the current royalties are retained the national budget will fall short of revenues from royalty payments and profit tax due to a decline in gas production by 500 million cubic meters, and the absence of growth of 600 million cubic meters. The resource [1.1 billion cubic meters] is to be compensated thanks to imports,” he told Interfax-Ukraine.
The expert said that the closure of private producer investment programs due to economically inviable drilling work will be next in the chain of events, with energy projects whose participants include ExxonMobile, ENI, EdF, OMV having been cancelled, and Shell and Chevron suspending their operations.
He said that these actions contradict the aims of the coalition agreement and defy logic.
