Ukraine

EITI Status Yet to be assessed against the 2016 Standard
EITI Member Since 2012
Latest Data From 2015
Website EITI Ukraine

Overview

Ukraine is rich in various natural resources. Extensive oil and gas extraction before 1990s has exhausted country’s easily accessible hydrocarbon reserves leaving it dependent on imported energy commodities. However, Ukraine has a significant potential for development of explored oil and gas fields including deep water offshore reserves and shale gas. The country also plays a significant role as an oil and gas transit hub between Europe and Russia. The government aims at bringing economic growth and foreign investment by tackling corruption and reforming  the regulation of the extractive industries and energy transit.  

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Tax and legal framework

The legislative framework that governs the oil and gas production is complicated and consists of several regulatory instruments which contain provisions that are not always compatible. A corporate profit tax and a subsoil use fee are the main taxes for extractive industries.

Ukraine has a license registry which is accessible online. Since October 2014 all companies registered in Ukraine are required by law to disclose their ultimate beneficiaries in a public register available online. The legislation of Ukraine does not require any disclosure of agreements related to subsurface resource use.

Contracts

The country does not have an open contract policy. However, a provision on contract transparency is included in the draft Law on Disclosure of Information in the Extractive Industries.

Licenses

Extractive companies have to apply for a special subsoil use permit that usually is awarded through auction. The State Service for Geology and Mineral Resources of Ukraine is responsible for issuing permits and regulations. All information on bidding is available online. Product sharing agreements define conditions for hydrocarbon exploration and extraction and are obtained through direct negotiations.

Beneficial ownership disclosure

Ukraine passed a law in 2014 requiring an upfront disclosure of beneficial ownership of companies to the Ukrainian authorities. All companies previously registered in Ukraine are required to disclose their ultimate beneficiaries in a public register. The 2014 EITI Report comments on this effort, noting that 66 of the 120 extractive companies covered by the EITI Report have disclosed their beneficial owners in the public register at the Ministry of Justice. 

Beneficial Ownership Roadmap - Ukraine
The EITI report is a social agreement between stakeholders. Our oil and gas industry can become a sector we can all be proud of.
Olga Bielkova, Member of Parliament

Production

In 2013 production of oil amounted to 3.07 million tons and natural gas amounted to 21.45 billion m3. According to State Statistics Service the natural gas and oil produced in Ukraine are not exported whilst ferrous metals hold 18.7% of country’s export. Five new deposits were discovered in 2013 in the east oil and gas region.

Natural resources

CommodityReservesUnitSignificance
Oil1.64billion tons
Gas7254.3billion m3
Coal 112.3billion tons1.5% of world's brown coal reserves.
Iron ores20.9billion tons

Oil and gas production

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Mineral Production

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Revenue collection

The contribution of the oil and gas sector to Ukraine’s GDP is insignificant. According to the State Statistics Service, the oil and gas sector holds about 1.3% of Ukraine’s GDP. The 2013 EITI report documents USD 3.3 billion of payments by oil and gas companies (including oil and gas transportation companies).

Revenue collection

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Bubble Chart: Government Receipts by Entities (Top 5)

Reconciled revenues by top 5 companies

Revenue allocation

The major share of oil and gas payments is channeled to the state budget. Taxes and other regular fees paid to the state budget may be used to fund any budget items. Therefore, the revenues from oil and gas received by the state are used in the same proportion as other revenues in the country. For example, according to Ukraine’s 2013 Budget 50% of income was spent on social assistance and education.

Social and economic contribution

  • The oil and gas industry (without transportation of oil and gas) employed 55 600 people in 2013. This represents approximately 0.48% of employed workers in the economy of Ukraine.

  • According to the State Statistics Service of Ukraine, the direct GDP contribution of the oil and gas sector (without transportation of oil and gas) amounted to UAH 20.0 billion or about 1.3 percent of Ukraine’s GDP. The output of oil and gas sector (without transportation of oil and gas) amounted to UAH 26.52 billion in 2013 or about 0.8 percent of the output of goods and services in Ukraine

Policy recommendations and reforms

According to the recommendations from the first EITI Report, Ukrainian multi-stakeholder group together with external experts and Members of the Parliament has developed a draft Law on Disclosure of Information in the Extractive Industries that was registered in June 2016 for vote in the Parliament of Ukraine.

Implementation

Coal and iron ore will be covered in the next EITI report. This may be challenging as the main concentration of coal mining is in the Eastern part which is a conflict zone. The Independent Administrator will conduct a scoping study to quantify coal sector revenues, and also explore materiality of other natural resources such uranium.

Governance

The Law 521-19 on Amendments to laws regulating transparency in extractive industries in Ukraine obliges "subsoil users and owners of special permits for oil and gas subsoil use to provide and disclose information about state and local taxes, fees and other payments, as well as on the production (economic) activity". Government entities administering these taxes, fees and other payments are also obliged to disclose those figures, in addition to contextual information. Further, governmental authorities charged with conducting geological surveys, use and protection of mineral resources must provide and publish information on the status of these activities.

Draft Law on Disclosure of Information in the Extractive Industries was registered in June 2016 for vote in the Parliament of Ukraine.

Timeline

Validation

Ukraine's Validation against the Standard will commence on 1 July 2017. The country was admitted as EITI candidate in 2013.

EITI Reports and other key documents

Ukraine 2016 Annual Progress Report

Published Date: 
June, 2017
Publisher: 
UAEITI

The Annual Progress Report provides an overview of all EITI Ukraine's activities during 2016.

The report is available in English and Ukrainian.

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2014-2015 Ukraine EITI Report

Published Date: 
February, 2017
Publisher: 
Ukraine EITI

This EITI Report covers Ukraine's extractive sector in 2014-2015. It was published in February 2017. Attached below is a summary report. 

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2013 Ukraine EITI Report

Published Date: 
November, 2015
Publisher: 
Ukraine EITI

This EITI Report covers Ukraine's extractive sector in 2013. It was published in November 2015. 

Read more
View all documents related to Ukraine in our publications library

Contacts

National Coordinator

International Secretariat 

Sam Bartlett EITI

Sam Bartlett

samuel_richard_bartlett
Technical Director
sbartlett@eiti.org

EITI responsibilities: Technical Director, including oversight of EITI mainstreaming, Validation and open data.

Dr. Bartlett joined the EITI International Secretariat in 2007 as the EITI’s Regional Director (Asia).

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Oliana Valigura

Country Manager
ovaligura@eiti.org

Oliana is Country Manager at the EITI International Secretariat working with Eastern Europe, the Caucasus and Central Asia. Nationality: Ukrainian Prior to joining the EITI in November 2015,

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Shemshat Kasimova EITI

Shemshat Kasimova

Asia Programme Coordinator
skasimova@eiti.org

EITI responsibilities: Provide support and coordinate EITI activities by the Secretariat and through partners in Azerbaijan, Kazakhstan, Kyrgyz Republic, Tajikistan, Mongolia and Ukraine.

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