The Asset Recovery and Management Agency (ARMA) and Public Joint Stock Company Ukrnafta call on the National Security and Defence Council (NSDC) to resolve the issue of Ukrnaftoburinnya's usage of a special permit for the period of martial law to ensure revenues to the state budget.

During the agency's public report for 2023, Head of ARMA Olena Duma called on MPs to introduce a draft law that would regulate the possibility of using a special permit for subsoil use and hydrocarbon production at the Sakhalin field in Kharkiv region as one that has national significance and to prevent the termination of billions of dollars in revenues to the state budget of Ukraine.

The relevant draft law was registered in the Verkhovna Rada of Ukraine on 01.04.2024 No. 11137.

Therefore, on April 1, 2024, ARMA and PJSC Ukrnafta issued a joint statement to the National Security and Defence Council of Ukraine to ensure uninterrupted hydrocarbon production, gas supply to the population, and stable revenues under the management agreement.

The statement to the National Security and Defence Council outlined the reasoned proposals of the National Agency and PJSC Ukrnafta, in particular, to decide on an appeal to the Verkhovna Rada of Ukraine to support the draft law amending the Subsoil Code of Ukraine to allow granting a special permit without an auction during the martial law regime by the decision of the National Security and Defence Council on the basis of an asset management agreement signed with ARMA.

As a reminder, PJSC MC Ukrnaftoburinnya held a special permit for subsoil usage and hydrocarbon production at the Sakhalin field in Kharkiv region. Unfortunately, the decision of the Sixth Administrative Court of Appeal cancelled the special permit, which threatened the national interests and energy security of the state. At the same time, the Supreme Court, in its ruling dated December 12, 2023, dismissed the cassation appeal of ARMA and also dismissed the cassation appeal of PJSC MC Ukrnaftoburinnya.

The estimated net profit of PJSC MC Ukrnaftoburinnya for 2024, which is the source of the state's revenues from asset management, based on the average performance indicators for 11 months of 2023, was UAH 6.5 billion.

The losses of the local and state budgets of Ukraine from the shortfall in revenues due to the suspension of Ukrnaftoburinnya's production activities (excluding personal income tax, unified social tax and military duty) amount to UAH 410.455 million per month.

In addition, a halt in production at the Sakhalin field could result in the citizens of Kharkiv Oblast being left without gas supply in a full-scale war

In this regard, PJSC Ukrnafta, ARMA and PJSC MC Ukrnaftoburinnya called on the MPs of Ukraine to legislatively allow the issuance of a special permit during the martial law regime without an auction in accordance with the decision of the National Security and Defence Council of Ukraine on the basis of an asset management agreement concluded with the National Agency.

We emphasise that all government agencies must join forces to ensure budget revenues and the smooth operation of such fields.

We hope that the statement on the protection of the national interests and security of the state as well as the already registered draft law will receive a positive response from the National Security and Defence Council, the President of Ukraine and the Verkhovna Rada of Ukraine.