Ministry of Ecology suggests cutting rental payment for gas extraction

​ The Ministry of Ecology and Natural Resources of the Ukraine considers reasonable to cut the rental payment for gas extraction from the current 28-55% (dependent on the depth of the well) to 14-28%, the Minister of Ecology, I. Shevchenko, said.

“The main problem restricting the process of gas extraction growth is the rise of rental payments. They were raised last year as a crisis measure. At that moment it was a correct decision but now I think they should be reduced to at least the level of August 2014. This is 14% for a well deeper than 5 thousand m and 28% for the rest”, the Minister said.

The Supreme Rada in the summer 2014 significantly increased rental rates for hydrocarbons extraction until the end of the year, however, in the framework of approval of the Government budget -2015 they were extended for 2015. For oil and condensate they make up 45% at the extraction depth of up to 5 km and 21% over 5 km, for natural gas not for the needs of the population – 55% and 28% respectively. A gradual rise of the rate is planned for the agreements on joint activity not dependent on the depth: Q1 2015 – 60%, Q2-65%, Q3-Q4 – 70%.