The District Administrative Court of Kyiv considered justified the application of Ukrgazvydobutok PJSC (part of Smart Energy Group) and suspended the decision of the State Geology Agency of Ukraine to revoke the special license for subsoil use issued to the company.

This decision was awarded by the court on Thursday, November 23.

Based on the court’s ruling, the company is planning to restart operation of its wells as soon as possible in order to prevent damage of the subsoil. Necessary regulatory actions are being taken at the moment.

Based on assumptions given by the specialists of the company, over the time of forced shutdown that lasted from 17 till 23 November, volume of gas that failed to be produced amounts to 2.2 mln m³, condensate – 70.2 t. This means the budget is going to lack 4 mln UAH of the tax payments that the company normally pays for the volume of produced hydrocarbons. On top of that, volume of gas that failed to be produced will need to be compensated by imported gas.

As a reminder, on November 17, 2017 Ukrgazvydobutok received an official letter from the State Geology Agency of Ukraine notifying the company about an order that revokes its special license for subsoil use. Such decision was made based on results of unplanned audit that took place in September this year. Issues raised by the State Geology Agency of Ukraine, which later laid the ground for the revocation of the license, were completely ungrounded. Ukrgazvydobutok has already presented to the state agency detailed reasoning for the non-occurrence of violations.

It has already been mentioned that as per State Fiscal Service data, in 2016 Ukrgazvydobutok was the 16th company among the top 100 based on financial indicators.

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).