MainMain

Government to seek cutting rent for new gas wells

Last year's attempt failed.

Government to seek cutting rent for new gas wells
Photo: Photo: kmu.gov.ua

The Cabinet of Ministers will again ask the Verkhovna Rada to lower the rate of rent for new gas wells from 29% to 12%.

"All those who obstruct the policy of energy independence will be declared enemies of the state. I will not tolerate this. Everyone must be provided equal conditions and access, subject to the existing requirements," the government press service quote the prime minister as saying at a meeting in Poltava on Thursday.

"By the end of the year, we must take concrete decisions regarding the simplification [of licensing] so that we moved towards energy independence. As far as new wells are concerned the size of extraction rent must be reduced to increase investment [in gas production].

Groysman's Cabinet made a similar an attempt in 2016 by submitting a bill suggesting lowering the size of rent for natural gas production on newly opened well from the current level to 12%. The parliament declined the move.

Currently, the rent production rent is set at 29% for wells with the depth of below 5 km and at 14% for deeper wells.

In 2016, Ukraine increased production of natural gas by 0.5% to 19.987 bn cu m over the previous year's 19.896 bn cu m.