Beneficiaries of foreign investor for shale gas production in Ukraine not disclosed: Media

Friday, July 29, 2016 - 15:36 (EEST) Section: Latest news

The beneficiaries of a new foreign investor chosen to develop Ukraine`s Yuzivska gas field, which has the largest shale gas deposits, have not been disclosed, according to Ukrainian news agency liga.net.
”Yuzgas B.V., which was registered in the Netherlands just a month ago, will develop the Yuzivska field instead of Royal Dutch Shell, which abandoned the project in 2015,” liga.net wrote.
This company was named the winner of a fresh tender, which was called in October 2015, to conclude a production sharing agreement (PSA) on the Yuzivska field in Kharkiv and Donetsk regions, it recalled.
”The announcement of the winner of the tender for the Yuzivska field has come as a surprise. The organizers involved neither the media nor the public in the process of selecting the new investor. Neither were the terms of the tender disclosed. It is unknown who is behind the newly created Yuzgas B.V.,” it stated.
”Yuzgas B.V. was registered on June 14, 2016, with charter capital worth EUR 1,000, particularly for the development of the Yuzivska field. The company is wholly owned by Luxembourg-based fund Emerstone Energy, which is managed by Emerstone Capital Partners, a Luxembourg-based asset management firm,” the agency reported.
Both entities were created in 2016 and the firm`s website was launched just a month ago – on June 29. Emerstone has not provided any information about its beneficiaries.
”Emerstone Energy manages assets worth US$400 million,” a posting on the firm`s website said. ”We are ready to invest about $250-300 million in promising hydrocarbon prospection and production projects.”
Jaroslav Kinach, a founding partner of Emerstone Capital Partners, is well aware of the realities of doing business in Ukraine. In the late 1990s, he headed the Kyiv office of the European Bank for Reconstruction and Development, following which he founded a Canadian firm, Iskander Energy, which executed methane gas production projects in Ukraine and also owned hydrocarbon deposits in Georgia and Bulgaria. In recent years, he was head of Canadian-based Black Iron.
Nadra Yuzivska LLC, a participant in the PSA on behalf of the Ukrainian government, has the license to develop the Yuzivska field. As of July 27 this year, 10% of the company belonged to SPK-Geoservice LLC (Kyiv), which was reportedly affiliated with the allies of former Ukrainian President Viktor Yanukovych, and the remaining 90% was held by Nadra Ukrainy. SPK-Geoservice changed its owners in 2015.
Notably, Ukraine`s state register of economic entities lists a Ukrainian-based company having a very similar name as the investor — Yuzgas LLC. It was registered in Kharkiv, and Yukhym (Yefim) Zviahilsky, an MP from the Opposition Bloc, is mentioned among its founders. His contribution to the statutory fund of the Ukrainian company is UAH 700,000. Another founder is Oleh Shapovalov, former member of Yanukovych`s Regions Party, who contributed UAH 50,000 to the statutory fund.