By KYIV. Nov 4 (Interfax-Ukraine) – PJSC Ukrnafta and the Smart Energy group moved into another round of legal confrontation after the decision of the Sixth Administrative Court of Appeal dated November 2, 2022, by which the court again refused to satisfy the appeal of Arkona Gas-Energy LLC for the right to develop Svystunkivsko-Chervonolutske gas and oil field.
"Yesterday [November 2] the Sixth Administrative Court of Appeal upheld the decision of the trial court in case No. 640/26257/21. This decision satisfied the claims of JV Boryslav Oil Company LLC (BNK) [one of the founders is Ukrnafta] and canceled the order of the State Service of Geology and Subsoil of Ukraine on the issuance of a license [to Arkona Gas-Energy] to use the subsoil of the Svystunkivsko-Chervonolutske gas field," Ukrnafta wrote on Facebook.
According to the company, the court also canceled a number of decisions of the Ukrainian State Commission on Mineral Reserves, including the decision to merge the Svystunkivske and Chervonolutske oil and gas fields into a single field.
"It was this association that contributed to the illegal issuance of the license at a reduced cost to Arkona Gas-Energy LLC [owned by the British Enwell Energy (formerly Regal Petroleum), which is part of the Smart Holding group of Vadim Novinsky], which was associated with the interests of the entourage of Petro Poroshenko, and now belongs to the oligarch Novinsky," Ukrnafta said.
As the company said, there was a corruption component in the process of issuing the license, which is currently being investigated by detectives from the National Anti-Corruption Bureau of Ukraine (NABU).
"The pretrial investigation body has already announced suspicions to the persons involved in this transaction," Ukrnafta said.
In turn, as reported in a Smart Energy press release on Friday, Arkona Gas-Energy will continue to defend its rights as an investor and will appeal the decision of the Sixth Administrative Court of Appeal in cassation with the Supreme Court of Ukraine.
"We consider it unreasonable, besides, it does not take into account the two previous decisions of the Supreme Court," Oleksiy Zayats, acting CEO of Smart Energy, is quoted in the press release.
According to Smart Energy, Arkona Gas-Energy, which is a Ukrainian asset of the public British company Enwell Energy, has all legal rights to develop the Svystunkivsko-Chervonolutske field, where a complex of geological exploration works has already been carried out and the first well has been drilled, and the total amount investments is more than UAH 400 million.
"In particular, the Smart Energy group believes that the decision of the Sixth Court of Appeal on the alleged illegality of issuing the license to Arkona Gas-Energia LLC to develop the field, which has been idle for 15 years without production, actually blocks its further development," the group said.
At present, Arkona Gas-Energia has carried out a significant set of geological exploration works at the Svystunkivsko-Chervonolutske field, including 3D seismic surveys on the entire licensed area, and extension well No. 4 has also been drilled, Smart Energy said.
