Business news from Ukraine


KYIV. July 21 (Interfax-Ukraine) – Kyiv will receive the funds it requires to complete the Shelter Facility for the Chornobyl nuclear power plant (NPP), Deputy Prime Minister of Ukraine Valeriy Voschevsky has said.

“The result of the meeting was the fact that almost all donors confirmed their additional contribution to cover lacking EUR 100 million for the new Shelter facility,” he said at a briefing on Monday in Kyiv after the Assembly of Donors of the Chornobyl Shelter Fund and the Nuclear Safety Account in London on July 16.

In particular, Kazakhstan will provide an additional EUR 3.5 million, Saudi Arabia – EUR 20.5 million, Sweden – EUR 1 million, China – EUR 4 million and Lithuania – EUR 1 million.

“We could say that donor countries are interested in the completion of the project in November 2017 and we managed to settle the issue of contributions in the amount of EUR 100 million and they will be made in the near term. In fact, the project will be financed in full,” Voschevsky said.

He said that EUR 800 million was initially required for the Shelter project, although due to technical errors the cost grew by another EUR 615 million. The total cost of the project then grew to EUR 1.5 billion.

In addition, EUR 70 million is required for the waste nuclear fuel storage facility.

“The total cost of the project is EUR 255 million. Eighteen months are left until the project is finished, and around EUR 70 million is required,” Voschevsky said.

He said that the initial cost of the project was EUR 275 million, and finally it reached EUR 320 million. According to the plan, the facility is to be finished in late 2016.



SIMFEROPOL. July 21 (Interfax) – Chernomorneftegaz (CNG), a Crimean government-owned oil and gas company, has prepared the feasibility study for the development of oil fields on the Kerch shelf in the Black Sea and the construction of an oil refinery, CNG chief executive Sergei Beim said.

“Front end engineering design work is being done. We’ve done the feasibility study, now we’re taking the investment project through the Council of Ministers of Crimea. The location [for production] has been determined – the Kerch shelf. The plant will be near Kerch,” Beim said at a press conference in Simferopol on Monday.

He said there is no point in building an oil refinery in Crimea without increasing oil production.

“It will be a cluster. Right now production is just 800 tonnes per month. This is nothing. Not a single plant can be built with such an amount of production,” Beim said. CNG produces gas and oil at offshore fields off the coast of Crimea and onshore fields on the peninsula.

Beim told Interfax at the end of 2014 that CNG planned to be producing 50,000-60,000 tonnes of oil products per month in five years and to fully supply Crimea with oil products refined from crude produced at offshore fields.

He said the company plans to develop the Subbotinskoye (Subotynske) oil field with estimated reserves of 400 million tonnes of oil equivalent, which is located southeast of the Kerch Peninsula and the neighboring Pallas structure.


KYIV. July 21 (Interfax-Ukraine) – Private gas producers plan to increase gas production in Ukraine by 1 billion cubic meters within two years if the Ukrainian parliament cuts royalties, Energy and Coal Industry Minister of Ukraine Volodymyr Demchyshyn has said.

“Two weeks ago I met with key market players that produce around 3 billion cubic meters of gas a year, and they declared their readiness to increase production by 1 billion cubic meters over two years,” he said on the Channel 5 TV late on Sunday.

He said that after the parliament cuts royalties the state should show that the new conditions will be in effect for a long period of time.

Demchyshyn also said that he supports VAT refunding for imported equipment intended for use in drilling and developing wells.

“This is a very important issue, as if VAT is not returned, the cost of equipment is increased by 20% at the first stage when it is the most risky one,” the minister added.

As reported, the Cabinet of Ministers of Ukraine registered in the parliament a draft law on cutting gas production royalties collected from private companies from October 1, 2015.

Draft law No. 2352a on amending the Tax Code of Ukraine regarding the taxation of economic entities that produce natural gas was registered on July 14, 2015.

Finance Minister Natalie Jaresko said that he draft law foresees the reduction of the royalty from 55% to 29% for up to five kilometers of depth, and from 29% to 14% for over five kilometers of depth.

The document also foresees the encouragement of drilling of new wells via the introduction of the three-tier taxation system for new wells from January 1, 2016.

Royalties for new wells will be 20% and 10% depending on the depth of extraction, profit tax will remain at 18%, and profit surtaxes – 30% of profit.



KYIV. July 20 (Interfax-Ukraine) – Cargill, one of largest producers of food, agriculture, financial and industrial products and services in the world, will invest $100 million in the construction of a new terminal at Yuzhny port (Odesa region), Ukrainian Prime Minister Arseniy Yatseniuk has said.

“One of the largest U.S. companies which has large experience of operation in Ukraine, Cargill, has decided to additionally invest around $100 million in Ukrainian infrastructure and construction of a terminal with the handling capacity of 4 million tonnes. The memorandum was signed, and the new terminal will be built at Yuzhny port,” he said in the parliament on Friday while speaking about results of his recent visit to Washington to attend an investment conference.

Yatseniuk also said that several agreements were made at the investment conference.

“We’ve focused on cooperation in the following areas: energy, agriculture, infrastructure and privatization,” he said.

Earlier in July, Cargill said that the company was mulling the possibility of building a deep-water terminal with M.V. Cargo (Odesa) at Yuzhny port.

Cargill said that in recent years it had shown interest in building a port grain terminal on the Black Sea which could promote the development of a long-term strategy for grain and oilseed business in the Black Sea region.

The port could become another joint project of Cargill along with the Constanta (Romania) and Novorossiysk (Russia) ports.

According to the state register of companies and individuals-businesspeople, M.V. Cargo was founded in 2004. Its founder is Cypriot Cornlex Impex Limited. The previous owners of M.V. Cargo were Valentyna Mushynska, Yehor Hrebennikov and Andriy Stavnitser (head and co-owner of TIS terminal group).


KYIV. July 20 (Interfax-Ukraine) – The leadership of state enterprise Antonov (Kyiv) has hired new managers, according to the press service of the company.

According to the report, Oleksandr Kotsiuba has been appointed as first vice president of the plant, Andriy Tarasiuk – vice president for financial and economic activities.

They have been tasked with increasing aircraft production and sales.

According to the press service, Kotsiuba has ten years of leadership experience, including in industrial companies, and has a reputation as a successful crisis manager. Over the last 11 years, Tarasiuk had headed companies in the automotive industry, including a large corporation with a network of 20 offices in five regions of Ukraine.

According to Antonov Acting President Mykhailo Hvozdev, the reshuffle is “aimed at forming a united team of professional managers, united by a common purpose of the development of the enterprise and the aviation industry of Ukraine as a whole.”

Antonov is the leading Ukrainian developer and manufacturer of aircraft, the recognized world leader in the niche of general-purpose transport aircraft. It cooperates with 76 countries. Since April, under the decision of the Ukrainian government, state enterprise Antonov has been part of Ukroboronprom state concern.



KYIV. July 20 (Interfax-Ukraine) – ArcelorMittal, one of the largest mining and metal companies in the world, which owns ArcelorMittal Kryvyi Rih (Dnipropetrovsk region), plans to invest $1.2 billion in Ukraine in the coming years, Ukrainian President Petro Poroshenko has said.

“In coming years ArcelorMittal Kryvyi Rih will invest $1.2 billion in Ukraine,” Poroshenko wrote on his Twitter page during a visit to the enterprise in Kryvy Rih after a meeting with Board Chairman and Co-owner of ArcelorMittal Lakshmi Mittal.

Poroshenko was attending the launch of a modernized blast furnace which had $132 million in it.

As reported, ArcelorMittal Kryvyi Rih saw a 1.9% decline in rolled steel output in 2014, to 5.56 million tonnes, steel output fell by 2.2%, to 6.29 million tonnes, and cast iron output was dropped by 1.1%, to 5.55 million tonnes.