The Cabinet of Ministers announced a competition for investors to develop two oil and gas fields
Government of Ukraine announced a competition for investors to develop two oil and gas fields in the west of the country in the format of production sharing agreements (PSA). We are talking about the Svichansk and Mezhyhirsk areas, which are located on the territory of the Lviv, Ivano-Frankivsk and Chernivtsi regions.
The tender documentation is prepared to create conditions for attracting investment in the exploration and production of hydrocarbons at these facilities. According to the agreement between the governments of Ukraine and the United States on the formation of an investment fund, the American partner receives the right of priority purchase of the extracted products (in particular, oil or gas) under the conditions specified in the agreement.
Separately, it is stipulated that the previous two resolutions of the Cabinet of Ministers of April 8, 2025, which related to tenders for the Svichansk and Mezhyhirsk sites, will become invalid.
Submission of applications for participation in the competition will last three months from the date of publication of the announcement — approximately until mid-November 2025. After completing the acceptance of proposals within one month, the Interdepartmental Commission for the Organization of the Conclusion and Implementation of Product Distribution Agreements must prepare and submit to the Cabinet of Ministers conclusions and proposals for determining the winners.
It is foreseen that agreements on the distribution of products will be concluded for a period of 50 years. The investor’s share in profitable products will depend on the ratio of costs and compensatory products and may be 35% (if the marginal value of compensatory products exceeds the costs to be reimbursed) or 65% (if the costs subject to reimbursement exceed the marginal value of compensatory products).
