Flat Black Cabinet

We are the Outcast's Oil and Gas Field in Ukraine

The Ukrainian government has revoked the license to develop Black Sea oil fields gas that was issued to Vanco Prykerchenska, a subsidiary of U.S. company Vanco Energy. Prime Minister Yulia Tymoshenko said that agreements were concluded with Vanco in 2007 were not transparent, and accused President Viktor Yushchenko of lobbying for Vanco's interests. Yushchenko flatly denied the accusation and called on Tymoshenko to revise its decision on Vanco. Meanwhile, Vanco has threatened to sue the Ukrainian government.

Vanco Energy, based in Houston, Texas, used to extract the oil in the U.S. and the North Sea. In the mid 1990s, he moved to West Africa. In 2005 he won a tender Vanco against strong rivals such as Shell and ExxonMobil to explore for oil and gas in the Prykerchenska Black Sea area, where deposits are estimated to contain hydrocarbons worth about 200 billion. A product sharing agreement (PSA) was signed with the government of Ukraine in October 2007. The government of then Prime Minister Viktor Yanukovych issued a license to Vanco Prykerchenska, and not Vanco Energy, which won the 2005 contest.

The government used this as a reason formal license revocation. Environment Minister Zerkalo Nedeli Heorhy Filipchuk said that the specifications do not allow Vanco to spend their right to develop deposits Vanco Prykerchenska, that there was in 2005 when Vanco won the tender.

Tymoshenko told a press conference in Kiev on May 12 that the ownership structure of Vanco Prykerchenska was not transparent. It was registered in BVI and legally belonged to four young Ukrainian students according to Tymoshenko. He said Vanco Prykerchenska was in talks to sell its rights to develop the Black Sea area, and that the Russian company Gazprom could be the buyer. This, according to Tymoshenko, was a threat to Ukraine's energy security.

Tymoshenko is also unhappy by the conditions of the PSA with Vanco, according to which Ukraine is entitled to 35 percent of oil extracted in the Black Sea in the first stage of the project. Tymoshenko calls 65 per cent. If you disagree Vanco, the best fields in the Black Sea should be taken from him and move to Naftohaz Ukrainy's oil and gas country, he said.

Tymoshenko also accused Yushchenko of lobbying for Vanco. "Everything that happened was on the orders of the president and against the national interests of Ukraine" said. "A corruption scheme began with Viktor Yushchenko's permission," he said. Yushchenko flatly refused, saying the legal assessment trade agreements was the prerogative of the police agencies, rather than the prime minister. On May 14 called on the cabinet to review its decision on Vanco. Andry Honcharuk Assistant Tymoshenko Yushchenko said it should open negotiations with Vanco in order to restore international confidence in the investment climate in Ukraine.

Vanco Energy Senior Vice President Jeffrey Mitchell said that international arbitration would be launched against the government of Ukraine at the Institute Arbitration of the Stockholm Chamber of Commerce, if no agreement was reached with Tymoshenko within 60 days. Speaking in Kiev on May 15, Vanco Energy had revealed that Vanco Prykerchenska three partners: the fuel of Donetsk and Energy Company (dtekas) Shadowlight Investments Ltd, linked to Russian businessman Yevgeny Novitsky and Technology in integrum (Austria), whose owners did not identify them. Mitchell said the JNR Eastern Investment, which represents the interests of the Rothschild family and was initially Vanco Prykerchenska partner in the project, had withdrawn from it before the conclusion of the PSA.

Many observers have suggested that Ukraine was the participation of dtekas in Vanco Prykerchenska Tymoshenko led to revoke the license. Maksym CEO dtekas dtekas Tymchenko said he was invited to join the project in 2006. Dtekas is linked to management system of capital the company of billionaire Rinat Akhmetov, one of the leaders of the opposition Party of Regions. Akhmetov opposed the Orange Revolution, which brought Yushchenko and Tymoshenko to power in 2005. Tymoshenko has been accused of involvement in several transparent privatization arrangements before and after 2005. Akhmetov denied the allegations and implied that Tymoshenko was biased against him.

Tymoshenko complained that Yushchenko's team put pressure on them at a meeting of the National Security and Defense Council on May 16, demanding to return the license to Vanco Prykerchenska. She said she would not obey the Council. Commentator Volodymyr Fesenko from the Kiev-based Penta reflection said in a conversation with Kommersant Ukraine that Tymoshenko would not restore Vanco's license because it was a matter between her and Yushchenko (Ukrainska Pravda, ITAR-TASS, May 12, Channel 5, May 14; Zerkalo Nedeli, 17 May, Kommersant Ukraine, May 16, 19).

About the Author

He has a background as civil engineer and geoscientist. He has worked mainly within the oil and gas industry from the mid 1980s. He has written a few fictional novels as well as being the author of some professional litterature within oil and gas sector, he is now an editor of some web sites.

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