The special permits for hydrocarbon production owned by Smart Energy group companies have been suspended again, which will have extremely negative consequences for the country, its economy, and many Ukrainian families.

On November 15, 2024, the State Geological Survey of Ukraine issued Order No. 535, which suspended the validity of three special permits for hydrocarbon production. The owners of these licenses are Prom-Energo Product LLC in the front-line Kharkiv region and the Regal Petroleum Corporation Limited Representative Office in the Poltava region, which are 100% owned by the public British company Enwell Energy.

The basis for the suspension of special permits was the Decision of the National Security and Defense Council of Ukraine “On the Application of Personal Special Economic and Other Restrictive Measures (Sanctions)”, which was put into effect on October 8, 2024 by Decree of the President of Ukraine No. 698/2024. From now on, the state will lose at least 9.5 million cubic meters of gas per month. m of gas, more than a thousand tons of condensate, almost a thousand tons of LPG. Development programs will be suspended, and this is more than 1 billion UAH of investments in Ukrainian subsoil. What does this mean for Ukraine? The situation in which the energy industry finds itself due to the war proves that the issue of producing its own Ukrainian gas is, without exaggeration, of strategic importance.

Accordingly, each cubic meter of gas produced by Ukrainian enterprises at the constant risk of missile and suicide attacks gives Ukraine a chance to get through the autumn-winter period and not lose its energy independence. The suspension of the Smart Energy group's special permits for the autumn-winter period will lead to losses by the state in production volumes, namely: 58 million cubic meters of gas, 6 thousand tons of condensate and almost 5 thousand tons of LPG. The budget will not receive 465 million UAH in taxes - this is a tangible blow to it. In addition, additional foreign currency will have to be spent to compensate for the lost natural gas and fuel - at least $35 million at current prices. Hundreds of Ukrainians may be left without work.

While the President of Ukraine Volodymyr Zelensky recently stated: "Saving jobs is a business contribution to our Victory." "We are a transparent and responsible business. We invest in Ukraine, its economy and future. We work for energy independence and support for Ukrainians in this difficult time of war. Ill-considered decisions that once again stop the work of our enterprises only increase the scale of losses not only for us, but also for the state, employees of the group's companies and ordinary Ukrainians. After all, this is a matter of national importance that affects everyone," said Acting General Director of the Smart Energy Group of Companies Oleksiy Zayets. The previous suspension of the activities of the gas-producing enterprises of the Smart Energy Group already has real negative consequences. During the 15 months of downtime, the state has already lost 195 million cubic meters. m of gas and UAH 1.65 billion in taxes.

We understand the need for national security measures, but we call on the authorities to take a deliberate approach to their implementation in order to avoid new negative consequences. The previous suspension of special permits has already caused significant damage to the state. We call for balanced decisions to preserve economic stability and energy independence of Ukraine. Reference The Smart Energy Group of Companies is part of the Smart Holding investment group, implements projects for the exploration and industrial development of hydrocarbon deposits and is among the five largest private gas producers in Ukraine, producing a total of over 1 million m³ of gas per day before the start of the Russian military aggression.

​​​​​​​The oil and gas sector of Smart Energy is represented by the Ukrgazvydobutok company (Kharkiv region), as well as the public British company Enwell Energy. In turn, Enwell Energy's assets operate in the Poltava region - these are the Representative Office of Regal Petroleum Corporation Limited and Arkona Gas-Energy, as well as in the Kharkiv region - the company Prom-Energo Product.