Naftogaz plans to initiate reduction of oil royalty
National joint-stock company Naftogaz Ukrainy plans to initiate the reduction of oil royalty, Board Chairman Andriy Kobolev has said in an interview Novoye Vremia magazine.
He said that in the current situation of low oil prices operations of the largest oil company – public joint-stock company Ukrnafta – could be loss-making.
"We want to propose that the royalty is decreased, including for oil production. If you look at the rates for gas producers, they radically cut them. The oil royalty was not changed, and it is rather high. With the prices of around $30 per barrel oil production in Ukraine could become loss-making," he said.
Kobolev said that the revoking of Ukrnafta's licenses due to the company's debts to the state would hit its value and affect its financial indicators.
"We are involved in the process and trying to help Ukrnafta to find ways to pay the debt to the budget," he added.
Kobolev also said that Naftogaz is waiting for the first negotiations with OJSC Gazprom on the application of new gas transportation tariffs in late February.
Earlier Ukrnafta Board Chairman Mark Rollins said that if the price falls below $33 for Brent oil this will be a problem for the company.
Naftogaz Ukrainy owns a 50% plus one share stake in Ukrnafta, a group of companies associated with the shareholders of PrivatBank holds about 42% of the shares.
