The gas supply system of Kharkiv may be disrupted due to the shutdown of one of the gas producing companies of the region Private Joint Stock Company Ukrgazvydobutok (part of Smart Energy Group). At the moment, the company is forced to put on hold its production in response to the notification from the Public Service Geology and Mineral Resources of Ukraine regarding revocation of the special license for the subsoil use.

Ukrgazvydobutok is one of the gas suppliers of the Kharkiv city gas ring. In fact, the company’s share of the total volume of supply is 10% or 300 thousand cubic meters per day. It jeopardizes the heating season in Kharkiv. Since the temperature is forecasted to drop down soon, the entire city with a million-plus population might be suffering “underheating” unless the company is able to restart its operation as soon as possible.

On November 17 , 2017 Ukrgazvydobutok received an official letter from the Public Service Geology and Mineral Resources of Ukraine that notified the company on the order #474 dd. October 30, 2017 that suspends its special license for the subsoil use. This decision was made based on results of the unplanned audit done in September 2017. Remarks given by the Public Service Geology and Mineral Resources of Ukraine that were used as the basis for revocation of the special license, do not in fact have any reasonable ground. Ukrgazvydobutok had earlier provided detailed justification of the lack of violations to the Public Service.

At the same time, the company was notified that order #486 dd. October 30 , 2017 restored special license that had been revoked by order #332 dd. July 28 , 2017 earlier. Based on this very order Director of PJSC Ukrgazvydobutok Vadym Mokhov was arrested on October 5, 2017 with a gross violation of procedural rules, although he showed up at the office of the investigator willingly. He is currently bailed from the custody.

Gross production of PJSC Ukrgazvydobutok over 10 months in 2017 has amounted to about 100 mln cubic meters.

We would like to remind you that on November 10, 2017 under initiative of the General Law Prosecutor’s Office of Ukraine, representatives of the State Fiscal Service searched gas producing companies of Smart Energy Group, central office and homes of the top managers. Investigative actions were taken in Kharkiv, Kyiv and in Poltava region as well.

Also, as it has already been mentioned, according to data of the State Fiscal Service of Ukraine based on financial indicators PJSC Ukrgazvydobutok was number 16 among the top 100 companies in 2016.

Reference

Smart Energy is a part of Smart-Holding in charge of implementing exploration projects, commercial development of the hydrocarbon deposits and alternative energy initiatives.

Oil & Gas business block of Smart Energy is represented by gas producing Ukrgazvydobutok (Kharkov region) and Regal Petroleum, a listed British company having assets in Poltava and Kharkov regions (Prom-Energo Product).