UNIAN
Ukraine may lose the right to develop oil and gas fields in Egypt, where the Zakordonnaftogaz subsidiary company of national joint stock company Naftogaz Ukrainy has been operating since 2012, according to a report by Naftogaz.
As noted by the company, since the beginning of 2015 State Financial Inspection has not approved a number of payments by Naftogaz to replenish the statutory fund of Zakordonnaftogaz, and as the result the company has accumulated arrears of taxes and labor contracts to a total of $109,000 USD, which is raising concern from the Egyptian side.
"In the case of failure to meet these obligations, Ukraine risks losing its rights to develop these fields, which endangers a loss of investments worth at least UAH 260 million," according to Naftogaz.
"In addition, the company is unable to carry out settlements with contractors," the company said.
As previously reported by UNIAN, in 2012 oil production in Egypt by Naftogaz of Ukraine amounted to 1,614,000 barrels.
In early 2012, Naftogaz of Ukraine, the Ministry of Petroleum of the Arab Republic of Egypt and the Egyptian state-owned company GANOPE (Ganoub EL-Wadi Holding Petroleum Company) signed a concession agreement for the exploration and subsequent operation of two oil blocks - Wadi Mahareeth No.8 and No.9 - located in Egypt’s Eastern Desert region.
The concession area covers over 20,000 square kilometers.
The oil production project of Naftogaz in Egypt is being implemented under the state program for hydrocarbons source diversification in Ukraine.
GANOPE is an Egyptian state-owned company, which owns exclusive concession rights throughout the southern part of Egypt.