Ukraine: Kinstellar Energy & Natural Resources Digest Ukraine, March 2019 In Review

Last Updated: 25 April 2019
Article by Olena Kuchynska and Viktoriia Pysmenna

OIL & GAS: Third International Licencing Round to take place on 18 June 2019

On 18 March 2019, Ukraine’s State Service of Geology and Mineral Resources (the Derzhgeonadra) announced plans to hold the Third International Licensing Round of e-auctions for the exploration and production rights to nine onshore hydrocarbon fields located in the Dnipropetrovsk, Ivano-Frankivsk and Kharkiv regions.

The auctions will be held on 18 June 2019 using the public e-procurement system ProZorro. The winner of each auction will be awarded a 20-year Exploration, Pilot Production and Production Licence (an E&P Licence).

Applications to participate and supporting documents can be submitted by 6 pm EET 17 June 2019. To participate, applicants must pay a guarantee fee (20% of the starting price indicated in the list below) and purchase auction documentation (capped at UAH 72,250, which is approximately USD 2,700). The auction winner also pays for the geological data.

The areas for which the licences will be sold include:

  • Kokhivska Block:
    • auction number – UA-PS-2019-03-18-000025-2;
    • starting price – UAH 2,660,000 (approximately USD 98,000);
    • price for geological data – UAH 577,548.90 (approximately USD 21,000);
  • Rozdolivsko-Uspenivska-1 Block:
    • auction number – UA-PS-2019-03-18-000034-2;
    • starting price – UAH 6,810,000 (approximately USD 250,800);
    • price for geological data – UAH 653,590.46 (approximately USD 24,000);
  • Rozdolivsko-Uspenivska-2 Block:
    • auction number – UA-PS-2019-03-18-000035-2;
    • starting price – UAH 3,100,000 (approximately USD 114,000);
    • price for geological data – UAH 488,697.51 (approximately USD 18,000);
  • Orilsko-Brusivska Block:
    • auction number – UA-PS-2019-03-18-000028-2;
    • starting price – UAH 23,110,000 (approximately USD 851,000);
    • price for geological data – UAH 468,391.90 (approximately USD 17,000);
  • Hoshivska Block:
    • auction number – UA-PS-2019-03-18-000038-2;
    • starting price – UAH 19,250,000 (approximately USD 709,000);
    • price for geological data – UAH 380,878.13 (approximately USD 14,000);
  • Yasenska Block:
    • auction number – UA-PS-2019-03-18-000023-2;
    • starting price – UAH 18,830,000 (approximately USD 693,000);
    • price for geological data – UAH 352,293.51 (approximately USD 13,000);
  • Bolekhivsko-Smolianska Block:
    • auction number – UA-PS-2019-03-18-000039-2;
    • starting price – UAH 2,450,000 (approximately USD 90,200);
    • price for geological data – UAH 133,226.34 (approximately USD 5,000);
  • Pivdenno-Slyvkynska Block:
    • auction number – UA-PS-2019-03-18-000040-2;
    • starting price – UAH 8,790,000 (approximately USD 323,600);
    • price for geological data – UAH 263,143.46 (approximately USD 9,600);
  • Skhidno-Kosmatska Block:
    • auction number – UA-PS-2019-03-18-000036-2;
    • starting price – UAH 8,980,000 (approximately USD 331,000);
    • price for geological data – UAH 114,833.42 (approximately USD 4,000).

An overview of the fields for which licences are to be auctioned can be downloaded here (available in English).

ENERGY: Regulator prepares draft rules for handling consumer complaints

Ukraine’s National Energy and Utilities Regulatory Commission (the “Regulator”) continues to develop normative acts to ensure the protection of consumer rights.

At the end of March 2019, the Regulator published on its website a draft version of the Rules on Handling Consumer Applications Relating to Companies Operating in the Energy and Utilities Sectors and Dispute Settlement (the “Draft Rules”). The Draft Rules would apply to applications submitted to the Regulator by consumers and future consumers in relation to the activities of companies operating in the regulated sectors of energy and utilities.

All interested stakeholders may suggest comments and proposals to the Draft Rules by 6 May 2019.

Types of applications and grounds for leaving them undecided

The Draft Rules provide for two different types of applications: a complaint (submitted after the review of the complaint by the company concerned), and a request. The latter may be (a) a request to assist in the realisation of the rights and interests of the applicant; (b) a notification of an alleged violation of the law by the company; or (c) remarks on improving the company’s activity.

Both complaints and requests will be handled free of charge within one month following their receipt, unless the Regulator prolongs the term to 45 days to collect evidence. The Regulator’s review may result in a resolution requesting redress, the imposition of fines or the termination of its handling of the complaint.

Upon receipt of an application the Regulator will carry out a preliminary check of its admissibility. If the Regulator identifies a systematic breach of the rights of consumers, it may arrange for an inspection of the company concerned.

The Draft Rules set out a number of grounds for leaving the application undecided, such as:

  • defects of competence: (a) the scope of the application is outside the Regulator’s competence; (b) the issue arose between two business entities, neither of which is a consumer; (c) the applicant is challenging the decision of a court, arbitral court, the general meeting of collective farming companies, joint-stock companies, or legal entities created on the basis of collective ownership; or (d) the application claims a breach of rights and interests by an association of citizens or the activities of such associations;
  • defects of the application: (a) the application does not comply with the basic requirements set out in the Draft Rules; (b) the application is anonymous; (c) the application is poorly written by hand; (d) the timeframe for submitting the complaint has already expired (for complaints only); or (e) the application contains a defamation of the Regulator and/or its officials, appeals to incite national, racial, religious hatred, and other unlawful actions;
  • eliminating competing proceedings: (a) the Regulator receives information that an effective decision on merits regarding the dispute has been adopted by a court; (b) the Regulator receives information that court proceedings relating to the dispute have been initiated; or (c) an application from the same applicant relating to the same matter has been already decided by the Regulator.

If the Regulator determines that it lacks competence to adjudicate the dispute it will send the relevant materials to the competent authority. If the customer’s application is not compliant with the requirements set out by the Draft Rules, the Regulator will clarify the proper procedure for submitting the application.

Brief overview of the complaint procedure

To lodge a complaint, a consumer first needs to initiate a complaint procedure against the company that allegedly breached his or her rights and enclose the company’s decision to this effect and other documents. If the company’s decision or a copy thereof is missing, the complaint is treated as a request and is handled under a different procedure.

The Draft Rules establish the timeframe for lodging a complaint, which is one year from the adoption of the company’s decision, but not later than one month from the date that the consumer learned of such a decision. The Regulator will reject complaints filed after this time period unless it finds that the consumer qualifies to be granted an extension.

Within the course of handling a complaint, the Regulator notifies the company in question of the breach of the rights of the consumer if it decides that such a breach has occurred. Provided that the company informs the Regulator of its timely redress of the complaint in question, the Regulator does not adopt a decision on a breach of the licensing terms and conditions of the legislation and instead adopts a decision on the termination of its handling of the complaint.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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