Photo from UNIAN
Ukrnafta's conservative plan envisages repayment of UAH 1.2 billion in 2018.
Ukraine's largest oil producer, Ukrnafta, in January-June 2018 (H1) paid UAH 7.4 billion (US$282.3 million) in taxes, including UAH 690 million ($26.3 million) in overdue tax debt.
"In January-June 2018, PJSC Ukrnafta paid UAH 7.4 billion in taxes, including UAH 690 million in overdue tax debt. The company continues to repay the outstanding tax debt on a regular basis along with all current taxes. Ukrnafta's conservative plan envisages repayment of UAH 1.2 billion in 2018. As of June 30, the outstanding tax debt made up UAH 11.05 billion," the company's press service said in a statement.
Meanwhile, the risks to repayment of the overdue tax debt remain the same. These are the attempts by the regulator to block production licenses as well as the instability of the state-run oil auctions where the company is required to sell its oil and condensate and the starting prices are set based on the formula approved by the government.
"Ukrnafta's proposals to reform the state oil auction have not been implemented in full and the competition at the auctions remains restricted. In particular, in H1 2018, only six out of 12 state-run oil auctions the company submitted applications for were recognized as valid," it said.
As UNIAN reported earlier, the national oil and gas holding Naftogaz of Ukraine in the spring of 2015 published its financial report for 2012-2013 audited by Deloitte&Touche, admitting that it had used at its discretion 10 billion bcm of gas belonging to Ukrnafta.
Because of Naftogaz's refusal to repay the debt to Ukrnafta for this gas worth UAH 50 billion and the broken auctions for the sale of oil through the fault of some officials from the Ukrainian Energy and Coal Industry Ministry and Naftogaz managers, Ukrnafta was incurred a debt to the state on paying taxes.
In July 2015, Ukrnafta shareholders elected British citizen Mark Rollins as chairman of the board. While in office, he was reported to have stabilized the financial situation at the company, which has paid a record high amount of dividends and ensured the current payment of taxes.
Since then, Ukrnafta has been among top five leaders in paying taxes among all Ukrainian enterprises, according to the State Fiscal Service (SFS) of Ukraine.
Read alsoCabinet not to allow monopolization of petroleum products market – Groysman
At the same time, Rollins repeatedly stressed that the company would be able to repay debts on taxes, provided that Naftogaz started paying off its debts to the company.
In addition, the Ukrnafta board has repeatedly proposed a plan for financial recovery of the company through rehabilitation procedure. However, Naftogaz and the Cabinet of Ministers refuse to approve it and require that the SFS distrain the company's property.
In 2016-2017, the Ukrainian courts on Ukrnafta's lawsuit made decisions binding the executive service to recover from Naftogaz 2 billion cubic meters of gas and the SFS to inscribe in pledge a disputable amount of gas. However, in the autumn of 2017, the Supreme Court of Ukraine overturned the lower courts' rulings regarding the writing-off of 2 billion cubic meters of gas as a tax lien and sent the case for a new consideration.
In May 2018, considering the lawsuit by Ukrnafta, Kyiv's District Administrative Court again ordered the SFS to write off the disputable 2 billion cubic meters of gas into the tax lien.
UNIAN memo. Ukrnafta is the largest state-owned oil and gas company in Ukraine. It accounts for 65.7% of oil and condensate production, and 5.3% of gas extraction in the country. There are 43 drilling rigs, 1,936 oil and 168 gas wells on the enterprise's balance sheet. Ukrnafta owns 537 fuel filling stations throughout the country. The company's 50% stake + 1 share belong to Naftogaz of Ukraine.