Ukraine continues to attract investment for energy exploration and production, by organising Production Sharing Agreement (PSA) tenders. In addition to nine onshore PSA tenders to be held in June 2019, on 12 April 2019 the Government officially announced a tender for execution of a 50-year PSA within the massive "Dolphin Block", comprising 9,500 sq. km, in the north-western part of Ukraine's Black Sea continental shelf.
Timing. Bidders are required to submit their bids by 17:30 (Kyiv time) on 12 June 2019. After the winning bid has been determined and approved, the successful bidder will have one year to negotiate and execute the PSA – i.e., by July 2020 (however, this term can be extended for six months, by January 2020).
Minimum investor commitments include (i) minimum spend obligations of UAH 1,500,000,000 (appr. USD 56,000,000), and (ii) drilling of at least five wells during the first stage of geological exploration (estimated to take five years).
Other terms remain the same as for the nine onshore PSAs which were announced in December 2018. These terms are described in 10 Facts about PSA in Ukraine, developed by Redcliffe Partners and the Association of Gas Producers of Ukraine.
Other useful links: Production Sharing Agreements Law (in Ukrainian); Resolution on carrying out the PSA tender within the Dolphin area (in Ukrainian); and Tender terms (in Ukrainian).
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