Business news from Ukraine

KYIV. Feb 15 (Interfax-Ukraine) – JKX Oil&Gas Plc in January 2017 increased average daily production in Ukraine by 9.9% year-over-year and by 13.4% on December 2016, to 4,356 barrels of oil equivalent per day (boepd), the company’s press service reported on Wednesday.

Gas production grew by 7.6% and 14.6% respectively, to 21.2 million cubic feet per day (MMcfd).

Average group production for January 2017 was 10,136 boepd, a 1.8% month-on-month increase, while production in Russia declined by 5.5% compared to December 2016, 5,779 boepd.

Average group production in January fell by 4.5% year-over-year.

“In Ukraine, gas and liquids production increases were driven by the workover of well NN47 at the Rudenkivske field that was completed in December,” the company said.

In January NN47 produced a total of 138 million cubic feet of gas and 5,786 barrels of condensate. In addition, the Ihnatovske field waterflood project commenced with injection of water through well IG126 in the southern part of the field.

According to the report, in Russia, gas production fell as effects of acid stimulation on wells 25 and 27 that completed in November began to subside. Further acid stimulation carried out on these wells in the latter part of January helped restore daily production to previous levels.

JKX said that in Hungary, gas sales from the Hajdunanas field commenced on February 2, 2017 at an initial rate of 1.8 MMcfd, after a production and sales break of more than three years. Production forecasting and development planning is underway and future work may include a workover of the existing Hn-1 well to add production from the Lower Pannonian reservoir interval.

Earlier JKX Oil&Gas Plc said that in 2016 the company saw a 7.5% fall in average daily production in Ukraine, to 4,001 boepd. Average group production grew by 12.1%, to 10,083 boepd.

The largest shareholders of the company are Eclairs Group of Ihor Kolomoisky and Hennadiy Boholiubov with 27.54% of the shares, Glengary Overseas Limited of Oleksandr Zhukov with 11.45%. In addition, Russia’s Proxima Capital Group owns 19.92% in JKX.

KYIV. Feb 15 (Interfax-Ukraine) – The Ukrainian media online advertisement market totaled UAH 1.784 billion in 2016, and this was 38% up on 2015, the Ukrainian Internet Association has said in a press release.
The direct sale share of the market was 47%.
The largest segment was the banner advertisement with 51.2% of the market. The share of advertisement in a video player (pre-roll, mid-roll, post-roll, pause-roll, overlay advertisement and picture-in-pause) was 28.7%, the share of in-page video (content-roll) was 4.8% and other unconventional solutions (pop-up or pop-under windows, catfish, screen glide, synchronous banners, frontlines, full screen advertisement, audio advertisement in the digital audio flow and other solutions) was 12.3% and sponsorship – 3%.
The media Internet advertisement recording was based on analysis of data from questioning of largest advertisement agencies, website and sales houses.
“AdPro(DAN), ITCG, Iplace, Publicis Groupe Media, TMGU, AdWork, DIEVO, MediaHead, Neos, Netpear, Promodo, newage leading online advertisement agencies and representatives of largest platforms, holdings and sales houses as Lux (Channel 24), RBC, RIA, Ukr.net, UMH, Digimedia, Admixer, DMDim/Go2Net, FISH, DigitalDecisions, Adwise, T-Sell, olx.ua, Finance.ua, Online.ua, Rontar, Novoye Vremia, Minfin.com.ua, Edipress, RST and Obozrevatel took part in the poll,” the Ukrainian Internet Association said.

KYIV. Feb 15 (Interfax-Ukraine) – The adoption of the bill on electronic trust services by the Verkhovna Rada would allow citizens to use smartphones to receive services from public agencies, while business will be able to take part in tenders of the European Union (EU) countries, Ukrainian Justice Minister Pavlo Petrenko has said.
“For ordinary Ukrainian this means that using own smartphone each of us will be able to register a company, sign any contract, send an inquiry and receive any information about operations of a public agency. All active operations of small and medium sized enterprises can be carried out in communications with public agencies using one small smartphone, without paper and talks with red tapists,” he said at a press conference at Interfax-Ukraine in Kyiv on Monday.
Petrenko said that the Verkhovna Rada earlier failed to pass the bill at second reading and he urged parliamentarians to adopt the bill soon.
“The adoption of the bill allows Ukrainian business to take part in tenders in the EU,” the minister said.
He said that tenders in the EU are held in the electronic form, and companies are identified using MobileID and BankID.
He said that by the end of 2017 many mobile operators are ready to introduce the identification system using MobileID, while banks are using BankID. The approval of the bill would allow introducing these systems to the operation of pubic agencies.
The minister promised that the Justice Ministry will be the first agency which will execute the bill after its adoption.
First Deputy Economic Development and Trade Minister Maskym Nefyodov said that the Economic Development and Trade Ministry is ready to start a friendly contest with the Justice Ministry in the issue of the quick introduction of the bill.

KYIV. Feb 15 (Interfax-Ukraine) – Starting from 2017 farmers will receive partial compensation of the cost of agricultural machinery in the amount of 15% of its cost via banks if the production localization for the machinery in Ukraine exceeds 35%.

Ukraine’s Cabinet of Ministers approved the relevant resolution in Kyiv on Tuesday.

“We want to achieve that the localization of Ukrainian agricultural machinery manufacturers by 2020 reaches 60%,” Agricultural Policy and Food Minister of Ukraine Taras Kutoviy said presenting the documents at a government meeting on Tuesday.

He said that the decisions made foresee the increase of localization to 45% in 2018, to 55% in 2019 and to 60% in 2020.

The minister recalled that the legislation passed at the end of 2016 allocates 0.1% of the cost of gross agricultural products for this partial compensation, or around UAH 550 million.

He said that next year the sum will be increased to 0.15% or around UAH 900 million, and will reach 0.2% in 2019, exceeding UAH 1 billion.

“The volume of agricultural engineering goods will be over UAH 4 billion,” Kutoviy said. He added that deterioration of agricultural machinery at farms today is some 85%, and its pace exceeds the upgrade pace.

KYIV. Feb 15 (Interfax-Ukraine) – A bill to support fishing industry could be drawn up by the State Fish Agency jointly with the Reforms Delivery Office by the end of March 2017.

The agency said that the bill will envisage the creation of the fishing industry fund that would accumulate funds from the fishing industry and distribute them using transparent rules.

“The fund is to ensure the use of the funds received in the sector for targeted development: fish planting, soil reclamation and bio resources protection programs. Support of fishing farmers should be a separate direction,” State Fish Agency Head Yarema Kovaliv said.

He said that reports of the fund should be updated regularly and published online.

The agency said that in 2016 only UAH 3.8 million fines were imposed for violation of fishing rules. Funds from compensation for industrial fish catch and dredging works were also received.

“According to Ukrainian law, the collected funds are sent to the budget and often they are sent to the programs not linked to fishing industry. The sector does not have money for fish planting and soil reclamation programs. We propose a model that would effectively distribute the funds for the needs of the sector and support stable fish stocks,” Kovaliv said.

Reforms Delivery Office expert Yehor Luchinkin said that practice of specialized funds when the money are sent to fishing industry development programs is popular in Europe. There is the European Maritime and Fisheries Fund (EMFF) with a total budget of EUR 8.6 billion. The funds are distributed to local programs of EU member countries and EU countries also have local funds.