VANCO PRYKERCHENSKA SAYS UKRAINIAN GOVERNMENT REFUSES TO NEGOTIATE BREAK OF PRODUCTION SHARING AGREEMENT

Ukrainian News Agency, Kyiv, Ukraine, Thursday, May 22, 2008

KYIV - Vanco Prykerchenska Company (Virgin Islands) has said the Cabinet of Ministers refuses to negotiate with the company on the break of the production sharing agreement. Jim Bown, representative of the company, announced this at a press conference within the Energy Forum in Kyiv.

According to the representative, the company has not received any official notifications on the cancellation of a license to develop the Prykerchenskyi block or on a resolution of the government of May 21 to unilaterally break the PSA.

According to the representative, Vanco won the license at an open tender and all of the companies who participated in it in 2006 are ready, in his opinion, to witness in favor of Vanco in the event of court proceedings.

Jim Bown denied the company was in talks with Gazprom on the possibility of Gazprom's participation in the development of the Black Sea shelf.

According to the company, the resolution of May 21 impacts negatively the investment climate in Ukraine and shows that Ukraine doesn't meet international agreements.

Lawyer Oleh Alioshyn, a partner of the law firm "Vasyl Kysyl," said the company did not know whether the Cabinet of Ministers decided on May 21 to withdraw from the PSA or to suspend Ukraine's participation represented by the Cabinet of Ministers in the project.

He said the former option is not allowed buy the legislation or the agreement, which gives clear rules of the break of the agreement.
Alioshyn said the company was ready to defend its rights at international courts and would win the cases.

None of the representatives of the company answered to a question how the company managed to hold the press conference during the Energy Forum, taking into consideration that the press conference was not in the plan or the program of the forum.

Jim Bown refused to answer whether or not the Secretariat of President Viktor Yuschenko facilitate the holding of the press conference.

As Ukrainian News earlier reported, Prime Minister Yulia Tymoshenko is sure that Ukraine will win litigation in the Arbitration Institute of the Stockholm Chamber of Commerce (Sweden) if Vanco Prykerchenska Ltd (Virgin Islands) tries to sue it.

First Deputy Prime Minister Oleksandr Turchynov announced that the Cabinet of Ministers decided to withdraw from the product sharing agreement with Vanco International, who ceded the right to develop oil and gas deposits at the Prykerchenskyi block of the Black Sea shelf to Vanco Prykerchenska.