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PM set to lower gas extraction rent to 12%

Currently, the rent is at 29% for wells with a depth of up to 5 km and 14% for a depth over 5 km.

PM set to lower gas extraction rent to 12%
Photo: Photo: Max Trebukhov

Prime Minister Vladimir Groysman during the weekly hour of questions to the Cabinet in the Verkhovna Rada advocated a decline in the rent for natural gas extraction.

He says the rent figures has to be reviewed as Ukraine needs to increase production of gas

"Experts say we can fully satisfy our own consumption but this requires time and investment. We used to produce production of 55 billion [cu m of gas]. Now we slid down to 20 billion. Of these, only 14 billion are manufactured by state-owned companies, the rest is extracted by private sector. Our goal is to increase the state output to 20 billion cu m by 2020. In 2016, we stopped the decline and increased production 100 mn cubic meters," Groysman said.

In his opinion, in order to increase gas production, the government needs to reduce the tax burden.

He said the government and the pro-presidential faction have recently discussed what needs to be done and agreed on the necessity to lower the rent for gas production in 2018

"We need to set a single rent figure for gas production at 12% and further deregulation," Groysman said.

Currently, the rent is at 29% for wells with a depth of up to 5 km and 14% for a depth over 5 km

In 2016, Ukraine increased natural gas production by 0.5%, or 91 million cubic meters to 19.987 billion cubic meters.