The partnership of Canadian Vermilion Energy Inc. and Ukrgazvydobuvannia in a joint project on development of three oil and gas fields in Ukraine under production sharing agreements (PSA) is now 50/50, according to its second quarter year report.
“Entering Ukraine aligns with our strategy to capitalize on opportunities in under-exploited basins by using modern technologies to improve success rates and recovery,” reads the document.
Vermilion said that subsequent to the end of the second quarter of 2019, it entered into a 50/50 partnership with Ukrgazvydobuvannia and were awarded two exploration licenses in Ukraine, subject to a final production sharing agreement.
“The licenses cover approximately 585,000 gross acres situated in one of Europe’s most prolific natural gas regions (Dniprovsko-Donetsky Basin). The new licenses are in close proximity to several multiTCF gas fields with most of the basin (and awarded license areas) still uncovered by 3D seismic. The terms of the licenses include a modest capital commitment, back-loaded over a five-year time frame,” reads the report posted on the company’s website.
As earlier reported, Canada’s Vermilion Energy jointly with a Ukrainian company (Ukrgazvydobuvannia) has won the right to develop three oil and gas fields in Ukraine.
On July 1, an interdepartmental commission for organizing the conclusion and implementation of the product sharing agreements (PSA) prepared for the government proposals on the winners in nine continental hydrocarbon sectors put up for auctions. Among them are Ukrgazvydobuvannia in alliance with Vermilion for Balakliyske and Ivanivske fields, Ukrgazvydobuvannia for Berestianske and Buzivske, private company Ukrnaftoburinnia for Rusanivske, U.S. Aspect Energy for Varvynske, DTEK for Zinkivske, Geo Alliance for Sofiyivske and Zakhidnadraservis for Uhnivske fields.
The head of the office of the National Investment Council, Yulia Kovaliv, said that now within two months companies must agree on the contracts themselves and sign agreements with the government in order to start exploration as soon as possible and to start work as soon as possible. She also said that the volume of investments of the winning companies is $430 million in the pessimistic scenario.
According to Vermilion report, its quarterly production volumes by approximately 1,300 boe/d and FFO by approximately $11 million, we recorded corporate production of approximately 103,000 boe/d, little changed from the previous quarter.
The net profit of Universal Bank (Kyiv) in January-June 2019 amounted to UAH 268.46 million, which is 5.7 times more than in the same period of 2018.
According to the report posted on the bank’s website, the net interest income of the bank in the first half of this year increased by 2.4 times compared with the corresponding period of 2018, to UAH 452.967 million.
The bank’s assets for six months of this year rose by 42.3%, to UAH 12.034 billion, in particular loans to customers were by 41.1%, up – to UAH 6.612 billion.
Since the beginning of the year, the bank’s liabilities grew by 43.4%, to UAH 10.898 billion, its net worth increased by 32.1%, to UAH 1.136 billion. Charter capital remained at the level of UAH 3.103 billion.
Universal Bank is part of TAS Group of businessman Sergiy Tigipko, which was founded in 1998 and has assets in financial and industrial sectors, agriculture, real estate, pharmaceuticals and venture projects.
A subsidiary enterprise Ecomix has said it is going to acquire 9.289 million of the ordinary nominal shares of PrJSC Mega-Polis insurance company (both Kyiv-based) that totals 74.3161% of a charter capital of the insurer.
According to the Ukrainian National Securities and Stock Market Commission’s information disclosure system, a total principal value of the package is UAH 9.289 million.
Ecomix was registered in May 2000 with a charter capital worth UAH 5,394, According to the Unified State Register of Legal Entities and Individuals, the company deals with wholesales of wooden and building materials. PrJSC Panacea Trade Limited and three Cypriots are the shareholders of the company.
Mega-Polis was founded in 2000. It specializes in risk insurance.
PJSC Diamantbank (Kyiv) has become the owner of 74.3161% of the shares of Mega-Polis insurance company (Kyiv), the National Depository of Ukraine said this on January 30, 2019.
At the same time, the report states that the insurance company does not own information, as a result of what actions (acquisition or alienation) and how (directly or indirectly) the change of ownership of securities occurred. It is emphasized that the previously the specified bank did not own shares of the insurance company.
According to the National Commission on Securities and the Stock Market, as of the fourth quarter of 2018, the owner of 74.3161% of Mega-Polis was Energotechprom LLC, and another 24.96% was owned by Serhiy Perelom.
The European Bank for Reconstruction and Development (EBRD) will provide investment up to EUR 149 million to Ukrenergo National Energy Company to acquire up to 26 new transformers and carry out the automation and upgrade of 12 high-voltage substations. “The investment will help Ukrenergo upgrade its key transmission infrastructure required for the synchronization with the European electricity networks. It will also assist Ukraine in aligning its legal framework and operational practices with the EU Third Energy Package,” reads an EBRD press release.
According to the bank, Ukrenergo will use the 15-year sovereign-guaranteed loan to acquire up to 26 new transformers and carry out the automation and upgrade of 12 high-voltage substations in key locations of the Ukrainian transmission network. The loan will also contribute to the annual reduction of CO2 emissions by 20,500 tonnes.
Besides, the investment will strengthen Ukrenergo’s capacity to accommodate the growing share of renewables in the Ukrainian grid, with an increasing share of wind and solar power. “A flexible, smart grid will be key to the sustainable electricity sector of the future,” said the report.
The EBRD financing is also promoting the commercialization and institutional development of Ukrenergo through the implementation of a comprehensive Corporate Governance Action Plan and robust procurement standards.
As reported, the total cost of Ukrenergo modernization project is EUR 198.2 million, including EUR 49.2 million of own funds of Ukrenergo and EUR 149 million to be provided by the EBRD.
The EBRD is the largest international financial investor in Ukraine. Since the start of its operations in the country in 1993, the Bank has made a cumulative commitment of almost €13.6 billion through 432 projects in the country.
The hryvnia to U.S. dollar exchange rate in the interbank foreign exchange market on July 31 strengthened to UAH 24.9845/$1 from UAH 25.0919/$1. The deputy chairman of the board of First Investment Bank, Vladyslav Kravets, told Interfax-Ukraine that the exchange rate in the interbank market on July 31 started with UAH 24.95-24.98/$1, and by the middle of trading it was UAH 25.075-25.115 per $1.
According to him, the steady trend to the hryvnia exchange rate strengthening due to the growth of non-residents’ investments in hryvnia-denominated government domestic loan bonds will continue in the near future.
“The seasonal growth in foreign currency earnings from agricultural exports has not gone beyond the figures that were last year or the year before, therefore the main driver for the current strengthening of the hryvnia exchange rate is the inflow of foreign investment in hryvnia-denominated government bonds. In the near future, the hryvnia exchange rate will continue to strengthen. The expected mitigation of the monetary policy of the Federal Reserve System and the European Central Bank, in response to a slowdown in economic growth, will stimulate the flow of investor funds to emerging markets, including Ukraine. If the NBU does not actively absorb the surplus of currency from the market to reserves, the hryvnia exchange rate will soon aim at around UAH 24/$1,” the banker explained.
Since the beginning of the year, the hryvnia exchange rate has strengthened by almost 10%, in particular by almost 4% over the last ten days.
The last time the hryvnia to U.S. dollar exchange rate was below UAH 25/$1 on August 12, 2016.
The European Bank for Reconstruction and Development (EBRD) could issue up to $80 million to Kernel, one of the largest Ukrainian agricultural groups, within the framework of a syndicated loan to finance working capital, which is associated with the procurement, storage, transportation and sale of grains for export.
According to the information on the bank’s website, the total cost of the project is $300 million (consists of the existing and increased working capital financing).
The decision on the project can be made on September 4, 2019. Now the project is at the concept review stage.
“The provision of up to $40 million in the form of participation in a syndicated senior secured revolving credit facility to finance working capital needs of Kernel Group. Working capital financing is associated with the procurement, storage, processing, transportation of oilseeds and vegetable oil products, and export sale,” the report on the website says.
The cost of the entire project is estimated at $390 million.
The project will be considered on September 4 of the current year. It is now at the study stage.
Kernel is the world’s largest producer and exporter of sunflower oil, a leading manufacturer and supplier of agricultural products from the Black Sea region.
