Private gas producers “threaten” authorities with reduction of extraction

Increasing the MET rate will lead to unprofitability of geological exploration and deep gas production, the participants of the private gas production market think. A letter from the companies Geo-Alliance, Burisma, Cub-Gaz, Tisagaz, Naftogazvydobuvannya, Smart Energy and Poltava petroleum company to the Prime Minister ,Arseniy Yatsenyuk, the head the Parliamentary Committee on Energy, Nikolai Martynenko and head the Parliamentary Committee on Taxation and Customs Policy, Vitaly Homutynnik says this in respect of the draft law № 4309a, providing growth of the MET rate for private companies by 70%.

The market participants note that the gas production doesn’t imply excessive profits in the amount of 700-1500%, as the cost of the gas production vary depending on conditions and methods of fields development.

They also point to the fact that the draft law doesn’t meet European standards of taxation. "One of the directions [...] should be an increase of own gas production. However, the draft law increases the cost of subsoil use to unprecedented levels in Europe," - the letter said. The document states that a similar rate in European countries doesn’t exceed 20%, while the draft law proposed to fix it at the level of 70%.