Ukraine cancel auctions for sale of hydrocarbons from resources of state-owned cos

MOSCOW. March 27 (Interfax) - Ukraine's government has canceled auctions for the sale of oil, gas condensate and liquefied gas, Ukrainian media reported, citing the Ukrainian Energy Ministry's press service.

The decision amends a number of government resolutions to bring them into line with the laws on oil and gas and on amendments to the legislative acts of Ukraine to enhance legislation on subsoil use, which comes into effect on March 28, 2023.

The resolution dated October 16, 2014, on organizing and holding auction on the commodity exchange for the sale of crude oil and gas condensate produced in Ukraine and liquefied gas was declared invalid, and appropriate changes were made to the statues on the Energy Ministry.

The sale of Ukrainian oil and gas condensate through an exchange auction was until recently mandatory if the controlling stake in the producer is owned by the state or it operates in conjunction with a state-owned company.

Ukrnafta has repeatedly said this model is ineffective due to problems selling the crude oil it produces, and has called on the government to intervene in the situation and revise the terms of the auctions.

There is almost no demand in Ukraine for the crude after the destruction of two oil refineries, Kremenchug and Shebelinsky refineries. The formation of the auction price based on quotations in Rotterdam, transportation costs and VAT did not make it possible to sell it for export.