Conducting a comprehensive check of compliance with the conditions stipulated in the production sharing agreement in Ukraine

In accordance with Article 28 of the Law of Ukraine "On Production Sharing Agreements" No. 1039-XIV dated September 14, 1999, at least once every five years, the Cabinet of Ministers of Ukraine, with the participation of the authorized central executive body, must organize and conduct a comprehensive audit of the fulfillment of the conditions stipulated by the production sharing agreement.

In order to implement Article 28 of the above-mentioned law, the Cabinet of Ministers of Ukraine, by Resolution No. 1589 dated 03.12.2025, approved the Procedure for conducting a comprehensive inspection of the fulfillment of the conditions stipulated by the production sharing agreement.

It should be noted that the Procedure for conducting a comprehensive inspection of the fulfillment of the terms of production sharing agreements does not apply to relations arising as a result of the exercise by executive authorities of state supervision (control) in the field of economic activity over the performance of work provided for by the production sharing agreement.

A comprehensive review shall be conducted on the basis of a decision of the Cabinet of Ministers of Ukraine adopted as a result of consideration of an application by the authorized body. 

The above-mentioned application shall be sent to the Cabinet of Ministers of Ukraine by the authorized body no later than one month before the end of the five-year period for which a comprehensive review has not been conducted in respect of each individual production sharing agreement.

Such an appeal must contain the name of the production sharing agreement and the period for which the comprehensive review is being conducted; a list of issues for conducting the comprehensive review; proposals for the composition of the commission in accordance with the competence of the executive authorities, in particular representatives of:

-Ministry of Energy;

-Ministry of Economy;

-State Service for Geoscience and Mineral Resources;

-State Tax Service (in case of an investor's application to the State Tax Service);

-State Service for Labor;

-State Audit Service;

-State Environmental Inspectorate;

-authorized body.

To perform the functions assigned to the commission, other executive bodies may be involved (as determined by the presiding body), namely the State Service for Geoscience and Mineral Resources.

In order to implement the decision of the Cabinet of Ministers of Ukraine on conducting a comprehensive audit, all executive bodies specified therein, except for the State Tax Service, submit proposals to the presiding body regarding the personal composition of the commission. 

Based on the submitted proposals, the presiding body shall, by its order, approve and notify the relevant executive bodies of the following: 

- the personal composition of the commission; 

-the term of the comprehensive audit (its start date and completion date); 

-an indicative plan for conducting the comprehensive audit, in addition to the plan for an unscheduled documentary audit of the transaction as a taxpayer; 

-a list of questions for conducting a comprehensive audit, formed on the basis of a sample list.

At the proposal of the executive authorities, changes may be made to the composition of the commission.

Before the start of the comprehensive audit, the authorized body provides the commission members with information (documents) regarding the audit of the oil and gas activity accounting account (if available) and independent audit reports (if available) for the period being audited.

The audit of the oil and gas activity accounting account may be carried out as part of a comprehensive audit, taking into account the specifics established by the production sharing agreement.

The total duration of the comprehensive audit is determined by the production sharing agreement. 

If the duration is not determined by the production sharing agreement, it shall not exceed 20 calendar days with the possibility of an additional extension of ten calendar days by decision of the presiding body.

The presiding authority shall notify the investor in writing of the planned comprehensive audit within the period specified in the production sharing agreement, and if such period is not specified, not less than 90 calendar days prior to the commencement of the comprehensive audit.

During the comprehensive audit, the commission members involve the investor in organizing access to production facilities and documents necessary for the audit. 

Cases of non-fulfillment or improper fulfillment by the investor of the terms of the production sharing agreement identified during the comprehensive audit are reflected in the commission member's conclusion.

The conduct of a comprehensive inspection shall not cause undue or inappropriate interference, restriction, obstruction or delay in the conduct of oil and gas activities. 

Each inspection shall be planned and conducted in such a way as to minimize any interference, obstruction or delay in the conduct of oil and gas activities.

The Cabinet of Ministers of Ukraine or any other executive bodies shall not have the right to conduct comprehensive audits regarding:

-periods that have already been audited within the framework of any of the previous comprehensive audits, as well as those periods that are not covered by the period for which the audits were conducted;

-issues that have been audited by state bodies within the framework of state supervision (control), including audits conducted in accordance with the legislation;

-issues that are not included in the list of issues for conducting a comprehensive audit, except for issues regulated by the Tax Code of Ukraine.

Based on the results of the comprehensive inspection, a member of the commission shall prepare, under his signature, a conclusion on the comprehensive inspection, indicating the violations identified in the implementation of the production sharing agreement and proposals for their elimination, which shall be approved by the head of the relevant executive body and submitted to the presiding body no later than 30 calendar days from the date of the end of the comprehensive inspection period.

Based on the results of the comprehensive inspection, the presiding body prepares a report on the comprehensive inspection.

Cases of non-fulfillment or improper fulfillment by the investor of the terms of the product distribution agreement identified during the due diligence are reflected in the due diligence report in the form of comments.

The presiding authority shall submit a copy of the comprehensive audit report to the Cabinet of Ministers of Ukraine and the investor within the period specified in the production sharing agreement, and if the period is not specified in the production sharing agreement, within 60 calendar days from the date of completion of the comprehensive audit.

The remark specified in the comprehensive inspection report shall be considered by the investor within the period specified in the production sharing agreement, and if the period is not specified, within 60 calendar days from the date of receipt of the report.

If, after six months from the date of submission of the due diligence report by the presiding body to the investor, there are still differences between the presiding body and the investor, the dispute may be resolved in accordance with the procedure specified in the production sharing agreement.

Building stones and other non-metallic minerals

Ukraine is one of the richest countries in the world in terms of reserves of building stones for various purposes (from monumental and facing to rubble).

Its deposits are known within the Ukrainian Crystalline Shield (magmatic and metamorphic rocks of the Archean and Proterozoic periods: granites, diorites, charnockites, gneisses, migmatites, quartzites, marbles, etc.), the Volyn-Podilsky Plate (basalts, sandstones, marbled limestones), the Black Sea Basin and the Steppe Crimea (sawdust limestones), the Carpathians (granite-gneisses, marbles, marbled limestones, andesite-basalts, tuffs), and the Mountain Crimea (marbled limestones, shell limestones).

In Ukraine, there are 246 known deposits of facing stone, over 900 (including complex accounting objects) deposits of building stone, and 199 deposits of sawn stone.

Low-melting (partially refractory) clay rocks that occur in nature in a dense, loose, and plastic state are used as a mineral for the production of bricks, tiles, and some ceramic products.

Among clay rocks, the following varieties are distinguished: clays, loams, loess, loess-like loams, mudstones, and clay shales.

Clay rocks occupy a significant share in the sediments of almost all geological groups in almost all geostructural regions of Ukraine: the Dnieper-Donetsk Depression and the Donetsk Folded Region, on the Ukrainian Crystalline Shield and its slopes, the Volyn-Podilsky Plate, in the Carpathian Folded Region, the Black Sea Depression, and the Crimean Folded System.

The State Balance of Mineral Resources of Ukraine includes 1,834 deposits (51 of which are complex). Most of the explored deposits are small.

For the production of cement, carbonate (limestone, chalk, calcareous tuff), carbonate-clay (marl, marly limestone) and clay (clay, loam, clay shales, loess and loess-like loam) rocks are used.

Rocks of sedimentary (diatomites, trepelle, opok, spongolite) and volcanic (tuffs, pumice, trass, volcanic ash) origin are used as additives.

Cement raw material deposits are located in the Dnieper-Donetsk Depression, the Donetsk Folded Region, the Black Sea Depression, the Crimean Folded Region, the Volyn-Podilsky Plate, the Lviv Depression, and the Carpathian Folded Region.

To increase the mineral raw material base of building stones and other non-metallic (brick and tile, expanded clay, cement, and other) raw materials, it is planned to conduct prospecting, exploration and evaluation, and geological exploration works in all geostructural regions of Ukraine in order to provide these minerals for our growing domestic needs and for their export.

Procedure for the functioning of the repository of geological information and stone material in Ukraine

The main aim of the State repository of geological information and rock material is storage of the primary geological information created (acquired) with state budget funds, as well as created (acquired) with own funds of legal entities and individuals, which is created for the purpose of its preservation, generalization and conduct of geological and geophysical and laboratory and analytical research.

The Repository Holder organizes an inventory of primary geological information that is state property and the entry of information into the catalog of information about geological information.

The Reposit Holder administrates by the State Geology and Subsoil Affairs of Ukraine.

The Repository Holder publishes on its official website the rules for access to primary geological information that is state property and is stored in the Repository for the purpose of familiarizing oneself with such information.

The functions of accepting and storing primary geological information, ensuring the functioning of the Repository, and providing primary geological information for use are entrusted to the administrator of the Repository, determined by the State Service for Geology and Subsoil Affairs of Ukraine in accordance with the agreement concluded with such administrator.

The Administrator of the Repository conducts scientific research, namely:

-development of a methodology for collecting, storing, processing and analyzing primary geological information;

-development of a methodology for creating collections of rock material;

-creation of reference collections of typical rock complexes and mineral deposits of certain genetic types.

The primary geological information is recorded by the Repository administrator. 

The primary geological information recording system involves the implementation of Barcode technology.

Primary geological information is recorded in an electronic inventory book (hereinafter referred to as the inventory book), which is an integral part of the accounting system.

Each unit of primary geological information is assigned a separate inventory number in accordance with the entry in the inventory book.

Material carriers of primary geological information, including in the form of rock material, stored in the Repository must be labeled with appropriate information to facilitate identification.

For each unit of primary geological information on paper, the inventory number is affixed to the cover of the binding of each storage unit in the upper right corner and on the title page. 

The same number is affixed to each separate appendix.

Storage of primary geological information is carried out in specially equipped storage areas with appropriate temperature and humidity conditions.

Primary geological information, including that presented in the form of cores of completed parametric, exploration, mapping and reconnaissance wells, after its geological processing, which includes documentation, testing, and sampling, is subject to storage.

Such information includes information and/or data on material carriers obtained during the use of subsoil as a result of conducting research on geological objects in their natural occurrence, samples, tests, as well as monitoring the condition, use and protection of subsoil, namely:

- documentation of routes, objects and observation points (including mines, sections, quarries, deposits, manifestations, mining operations, wells, water bodies, etc.);

- rock samples, core, oriented core, formation fluids, other natural formations and their description, field logs of sampling and testing of natural geological materials, distribution of samples and tests by type of analysis;

- reports and materials of laboratory and analytical research;

- documentation of field geological and geophysical observations, primary digital records of all types of observations, field graphics;

- documentation regarding mining and drilling operations;

- documentation on conducting well research and testing;

- documentation on monitoring the state of subsoil.

Collections of rock material from typical rock complexes and reference mineral deposits, as well as cores from reference wells, are preserved for life.

Cores from mapping, exploration and wells must be stored in abbreviated form (as representative samples).

To ensure the possibility of viewing the core, the premises for its storage must be equipped with special racks, which are arranged with the possibility of free access (if special equipment is required) to the boxes where the core is stored.

The core is placed on the racks according to the numbering of the boxes for each well.

To make it easier to find the core of the required wells, a sign indicating the inventory number and barcode is posted on the front of the boxes.

A sign is hung on the end of the rack on the side of the passage indicating the collection number, the area of ​​the subsoil where the drilling was carried out, the well numbers and the year of their drilling.

Primary geological information is subject to storage in both physical and digital form (stone material - in the form of digital photographs, paper documentation - in scanned form, electronic documents - in the form of files).

Graphite. Deposits.

Ukraine ranks sixth in the world in terms of reserves of graphite ores (about 6 percent of deposits) and eleventh in terms of their production.

The Berdychiv, Pobuzky, Kryvorizky, and Pryazovsky graphite-bearing regions are distinguished within the Ukrainian crystalline shield, within which 6 deposits and about 10 manifestations of crystalline graphite have been established.

336.7 million tons of graphite ore are recorded in the State Balance of Mineral Reserves of Ukraine.

As of 2024, the southeastern section of the Zavallivskoe deposit is being developed, the Zavalvske deposit (Zarichna section), the Balakhivske deposit (southern section) and the Burtynskoe deposit (Horodnyavska section) are being prepared for development.

Mariupol, Troitske, and Petrivske deposits are also accounted for in the State Balance of Mineral Reserves of Ukraine.

The task of finding and exploring rich (loose and mixed) graphite ores is urgent, both for Ukraine's own needs and for export.

In order to increase the mineral and raw material base of graphite, it is planned to carry out prospecting and evaluation and geological exploration works in areas of the Ukrainian crystalline shield.

Glauconite in Ukraine

Glauconite is used as an important natural adsorbent or as a complex agronomic ore.

In addition, it is used in the reclamation of soils contaminated with radionuclides.

Glauconite is a concomitant component of phosphorite ores or forms independent deposits of quartz-glauconite sands.

In Ukraine, deposits of quartz-glauconite sands of the Neogene and Cretaceous periods are widespread on the territory of the Volyn-Podilsky Plate, the Ukrainian Crystalline Shield, and in the southeastern part of the Dnieper-Donetsk Depression.

There are no explored deposits of glauconite in Ukraine, but in a number of regions quartz-glauconite sands with a glauconite content of 40-60 percent are common, which can be used as an associated mineral in the extraction of amber using the classic quarry method.

To increase the mineral resource base of glauconite, it is planned to conduct prospecting, prospecting and evaluation, and exploration work within the Middle and Left-bank Transnistria, in Crimea, the Donetsk region, and in other sedimentary basins.

Quartz sand for glass production

Ukraine has significant reserves of quartz sand and exports it.

For the production of ordinary glass, quartz sand of various qualities is used, enriched or not, and for the production of quartz glass - very pure, mainly enriched quartz sand.

The state balance of mineral reserves of Ukraine considering the Gusarivka quartz sand deposit, which has various areas of application - molding and abrasive sands, sands for the glass industry.

In the northwestern region of the Ukrainian Crystalline Shield, in the basin of the Teteriv River, the Bilokrynytske and Kodrynke deposits of alluvial and fluvioglacial quartz sands are known, and in the Dnieper-Donetsk depression - the Novoselivske and Berestovenkivske deposits.

With the development of the glass industry, the need for high-quality quartz sand is constantly increasing.

Due to the distribution of quartz sands of various genetic types in Ukraine - alluvial, glacial, marine, lacustrine, aeolian and others - there are opportunities for increasing their mineral raw material base.

To this end, it is planned to conduct search, search and evaluation and exploration work for the corresponding high-quality mineral within the promising areas of the Dnieper-Donetsk Basin, the Ukrainian Crystalline Shield and other regions.

Feldspar reserves in Ukraine

On the territory of Ukraine, within the Ukrainian Crystalline Shield, feldspar rocks of the Archean-Proterozoic era are widely distributed.

Pegmatites of 33 localization fields tend to massifs of granites of various complexes, forming clusters of mainly vein bodies with an average thickness of 3-8 meters, often of a differentiated structure.

The block and pegmatite zones of such veins are of industrial interest as feldspar raw materials.

For many years, the mineral and raw material complex has not met the needs of Ukrainian industry in feldspar raw materials due to the import of about 300 thousand tons of feldspar concentrate per year.

To increase the mineral and raw material base of feldspar, it is planned to:

-conduct search, and evaluation and reconnaissance work in promising areas of the Ukrainian Crystalline Shield;

-introduce domestic technologies for enrichment of alkaline kaolins.

Kaolins

Kaolins are distributed mainly in the Ukrainian Crystalline Shield, where one of the leading kaolin provinces in the world stands out, the richest in Europe, and can be traced from Polissya to the Sea of ​​Azov.

Kaolin has been exported from Ukraine to dozens of countries around the world for the production of the highest grades of porcelain and paper since the century before last.

As the experience of developed countries shows, effective extraction of high grades of these minerals is carried out in small deposits located in simple mining and geological conditions.

To increase the mineral raw material base of primary kaolins and slag, it is planned to conduct:

-search and evaluation and exploration works for primary kaolins within the promising areas of the Ukrainian Crystalline Shield;

-search and evaluation and exploration works for slag within the promising areas of Kharkiv, Sumy, Vinnytsia and Khmelnytsia regions.

Geological information and the procedure for obtaining it in Ukraine

The list of geological information includes information and/or data of geophysical, geochemical, hydrogeological, technological, physical-geographical, geodetic, geoastronomical, aerospace, petrographic, and paleontological content.

In addition, the content of geological information includes indicators that characterize the geological structure of the subsoil, mineral deposits, the composition of raw materials and the properties of rocks, ores, minerals, hydrocarbons, and groundwater.

Geological information is an object of civil law relations and can be used as a contribution to the authorized capital of legal entities.

Geological information created (acquired) with funds from the state budget is state property.

The State Service for Geology and Nadra is the administrator of geological information that is state property.

Primary geological information, which is state property, is subject to mandatory transfer to the State Repository of Geological Information and Stone Material (after its creation).

Geological information created (acquired) at the own expense of legal entities and individuals is their property. 

The owner of geological information shall notify the State Service for Geology and Subsoil of its creation, acquisition, transfer of ownership of geological information or the right to use it by him.

The owner of geological information may transfer primary geological information belonging to him, including geological information that cannot be digitized due to its physical properties (samples, etc.), for storage to the State Repository of Geological Information and Stone Material.

The agreement on the terms of subsoil use when obtaining a special permit for subsoil use specifies the obligation of the subsoil user to notify the State Geological and Subsoil Service of Ukraine about the creation, acquisition of geological information, transfer of ownership of geological information or the right to use it.

The results of work and research on the geological study of the subsoil are transferred by the performers for state (permanent) storage to the state scientific and production enterprise "State Information Geological Fund of Ukraine".

Secondary (processed) geological information, which is the result of work and research on the geological study of subsoil, is transferred by performers for state (permanent) storage in electronic form on a digital medium.

At its own expense, the applicant has the right to make an electronic copy of such geological information for its own processing or interpretation. The digital image created as a result of making such a copy is the property of the state, and the right to use (non-exclusively) the copy belongs to the applicant.

Information on geological information, regardless of the type and form of ownership, is subject to registration in the catalog of information on geological information, which is maintained by the State Information Geological Fund of Ukraine.

Dates on the creation, acquisition, transfer of ownership of geological information or granting of the right to use geological information shall be entered into the catalog by the subsoil user who is the owner or user of such information within ten working days from the date of its creation or change of ownership using electronic identification means - a qualified electronic signature or an advanced electronic signature.

Acceptance for state (permanent) storage in the State Geological Fund of secondary (processed) geological information that arose during the conduct of work and research on the geological study of the subsoil is carried out after the performers have entered the primary geological information used during the creation of materials submitted for state (permanent) storage into the catalog.

Disclosure of the content of geological information created (acquired) at the own expense of legal entities and individuals and information about which is recorded in the catalog is carried out exclusively with written consent and on the terms determined by the owner of such information.

Disposal of geological information involving the participation of counterparties subject to the Law of Ukraine “On Sanctions” and regulatory legal acts adopted in accordance with the said Law is prohibited.

Primary (raw) geological information, which is state property, is provided for review at its storage locations free of charge with simultaneous notification to the State Service for Geology and Mineral Resources.

Primary geological information, which is state property and is destroyed during processing due to its physical properties (stone material), is provided to the applicant for research after advance payment by him of compensation for the state's expenses for obtaining such geological information.

The use of secondary (processed) geological information that is state property is free of charge. Such geological information must be posted in open online access on the web portal of the State Geological Fund and/or provided in the form of copies (in electronic form).

The fee for secondary (processed) geological information, which is state property, is charged to subsoil users only in the event of obtaining a special permit for subsoil use as compensation for state expenses for geological exploration work carried out.

Production sharing agreements may contain different terms for the investor to obtain geological information.

In any case, it will be convenient for the investor if the operator of the agreement on the state side takes care of this issue independently.

Amber

It combines the varieties traditional for Ukraine: amber, topaz, beryl, rock crystal.

Resources of amber, marble onyx, rhodonite have been estimated.

Manifestations of emerald, aquamarine, ruby, sapphire, garnet, amethyst and various jewelry stones have also been discovered, but the prospects for their industrial development have not been clarified.

Of all the types of natural colored stones in Ukraine, amber is the most competitive.

At the same time, taking into account the natural specificity of the area of ​​distribution of this mineral - mainly forestry lands - the comprehensive development of deposits with further reclamation of the worked-out territories requires the determination at the state level of a list of lands disturbed by amber seekers, indicating the coordinates of the territories in Volyn, Zhytomyr and Rivne regions, and coordination of the action program with the central executive body that implements state policy in the field of forestry and hunting.

It is also time to map the distribution areas of strata containing amber.

Given the large area of ​​land disturbed by amber prospectors, it is necessary to give priority to geological exploration and amber mining within the already disturbed lands with subsequent reclamation of the relevant land plots.

Diamond deposits in Ukraine

Three areas of manifestation of kimberlite and lamproite magmatism (primary sources of diamonds) have been identified on the territory of Ukraine - the north of the Volyn-Podilsky plate, the northwestern and central parts of the Ukrainian crystalline shield, and the Azov massif and the zone of its articulation with the Donetsk basin.

The real prospects for discovering industrial diamonds are associated with metamorphosed conglomerates, primarily the Bilokorovytska paleodepression, where diamond grains of kimberlite genesis in the 4+2 millimeter class have already been identified.

In addition to the above areas, there are also real prospects for discovering industrial diamonds based on a complex of geological and geophysical data in other areas, but specialized exploration work to discover these precious stones requires attracting significant amounts of investment.