Parliament votes to deregulate natural gas production

Source : 112 Ukraine

231 MPs voted in favor of the bill
16:57, 21 December 2017

Verkhovna Rada supported bill #3096-D, which will make the procedure of obtaining a license for natural gas production easier. According to the explanatory note, today the average procedure of all approvals and land allocation lasts 4 years and includes 44 approvals from 16 different institutions, which enables corruption. Full text of the bill was published on the official website of the Ukrainian Parliament. 

The document allows using the land during the period of transition between different designated purposes and application for approvals confirming the right to use - after the pilot development of a gas field is complete and the industrial development of the field has begun. Such use of the land will be allowed based on an agreement with the landowner or in coordination with its occupier. As of today, it is not allowed to develop a gas field while the approval of the legal right to the land is pending.

Using the covenant mechanism, the goal of the changes to the Land Code is to allow land use without changes to its designated purposes. The bill provides the permission to take soil off land and transfer it in case of drilling and development of oil and gas holes, construction or use of pipeline transport. The bill abolishes the obligation to obtain a concession.

The obligation to refund the landowner any costs that arise from the use of agricultural land for oil and gas mining and from the loss of farmland is designed to provide appropriate soil preservation.

Items of oil and gas industry, namely holes, pipelines and others are expected to be excluded from the list of urban planning items, hence removing the need to register them as town planning objects. The State Commission for Mineral Reserves is expected to lose its exclusive right to conduct the geological and economic evaluation. These changes will enable the implementation of the international system of mineral reserves valuation and the introduction of market mechanisms in this process.

License-holders will be allowed to handle the geological information they own as they wish. The bill provides the removal of the obligation to bring an oil/gas field into industrial production according to a decision by the Ministry of Energy and Coal Production. It also introduces the declarative principle of coordination of field development projects.  


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