Fuel March Minutes The Chamber of Commerce in Ukraine by liaoqinmei

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									Chamber Fuel and Energy Committee Meeting

Friday, March 24, 2011, 10:00 AM, Chamber Conference Facility

Attendees:

Mr. Mykhaylo Paliy, ACI Ukraine LLC
Ms. Marina Zakrevska, AES Ukraine
Ms. Alfiya Jumayeva, AES Ukraine
Mr. Yaroslav Petrov, Asters
Ms. Natalya Kim, Chadbourne & Parke LLP
Mr. Kosta Jovanovic, Chevron Ukraine LLC
Mr. Vitaliy Radchenko, CMS Cameron McKenna LLC
Ms. Nataliya Shmelova, Deloitte.
Mr. Danylo Pogrebnyak, Galnaftogaz Concern PJSC
Mr. Igor Burakovsky, Institute for Economic Research and Policy Consulting
Ms. Victoria Sergeeva, RWE Dea UKRAINE LLC
Mr. Oleksiy Tatarenko, Shell
Ms. Valeria Tsyganenko, The Chamber
Ms. Nataliya Plikha, The Chamber
Mr. Nicholas Tymoshchuk, TNK-BP Commerce LLC
Mr. Artem Avetian, Ukrainian Universal Exchange
Mr. Artem Krenbok, Vasil Kisil & Partners

The agenda of the Meeting was as follows:

1. Discussion of the work on the review of the Presidential Program of Economic Reforms in the energy
sector.

2. International Conference «Energy Policy of Ukraine: Unconventional Gas Focus» to be held in Kyiv on
April 20-21, 2011. Please click here to view the Draft Program of the Conference.

3. Discussion of the legislative developments in the electricity sector, particularly Draft Law of Ukraine #
7420 “On the Amendements to Certain Legislative Acts of Ukraine regarding Arrangement of the Payments for
Services that are Provided by the Subjects of Natural Monopolies” adopted by Verkhovna Rada of Ukraine in
the first reading.

4.    Work on the Draft Subsoil Code of Ukraine.

Discussions



_____________________________________________________________________________________________________________________________________
Board of Directors: Mr. Ian Borden, McDonald's – Chairman; Mr. Boris Krasnyansky, PricewaterhouseCoopers – Vice Chairman; Dr. George
                    Logush, Kraft Foods – Vice Chairman; Mr. Jason Murphy, British American Tobacco – Treasurer; Mr. Jacquot Boelen, METRO
                    Cash & Carry – Secretary; Mr. Didier Casimiro, TNK-BP; Mr. Peter Chernyshov, Slavutich, Carlsberg Group; Mr. Steven Fisher,
                    Citibank; Mr. Walter Gordon, Coca-Cola; Mr. Andre Küüsvek, European Bank for Reconstruction and Development; Mr. Yuri
                    Miroshnikov, Ukraine International Airlines; Mr. Jacques Mounier, Corporate and Investment Bank Credit Agricole; Mr. Alexander
                    Rodionov, Procter & Gamble; Mr. Andrzej Rozycki, Cargill; Mr. Floris Schuring, KPMG; Mr. Dmitry Shymkiv, Microsoft.

President:          Mr. Jorge Zukoski
1.    Discussion of the work on the review of the Presidential Program of Economic Reforms in the
energy sector. Please click here to download the official schedule of reforms in the oil and gas sector and here
to download the official schedule of reforms in the electricity sector.

The participants discussed the possibility of arranging a workshop for the experts of National Electricity
Regulatory Commission (NERC) on the foreign expertise and legislative basis of the address help and cross-
subsidization elimination in the developed countries and resolved to come back to the issue after consideration
of available capabilities at the next Committee meeting.

Fuel and Energy Committee members noted basic reasons of the major delays in the government fulfillment of
the official schedule of reforms, such as lack of political will, administrative reform and desire to keep prices
low.

The Committee resolved to identify several priority issues in the electricity sector as well as oil and gas sector
and closely follow their implementation with the President`s Administration and international financial
institutions by issuing Chamber positions and letters.

Electricity sector:

-        Tariff methodology implementation
-        Cross-subsidies elimination
-        Tariff increase for residential customers
-        Connection rules and connection fee
-        New market structure

Oil and gas sector:

-      Licensing terms for oil and gas extraction, absence of redrafting Subsoil Code in the official schedule of
reforms
-       Improvement of PSA legislation, particularly re-introducing of the stabilization clause and tender
procedures
-       Creation of liberalized gas market (unbundling of NAK “Naftogaz”, independence of NERC as a
regulatory body, equal non-discriminate access to infrastructure)
-      Liberalization of prices and tariffs for all groups of customers
-      Stimulation of modernization of refineries and timely switching to Euro 4 and 5 standards.

The Committee resolved that its Leadership will draft a Chamber letter within the course of two-three weeks on
the priority issues in the Program and develop stakeholders engagement plan into their implementation.

The agenda of the next Committee meeting will include specific issues for following within the Program after
all members have a chance to study them more closely.

Among other aspects to be handled or commented by the Committee in the nearest future, the participants noted
the issues of royalties for extraction of hydrocarbons and the issue of access to geological data.

_____________________________________________________________________________________________________________________________________
Board of Directors: Mr. Ian Borden, McDonald's – Chairman; Mr. Boris Krasnyansky, PricewaterhouseCoopers – Vice Chairman; Dr. George
                    Logush, Kraft Foods – Vice Chairman; Mr. Jason Murphy, British American Tobacco – Treasurer; Mr. Jacquot Boelen, METRO
                    Cash & Carry – Secretary; Mr. Didier Casimiro, TNK-BP; Mr. Peter Chernyshov, Slavutich, Carlsberg Group; Mr. Steven Fisher,
                    Citibank; Mr. Walter Gordon, Coca-Cola; Mr. Andre Küüsvek, European Bank for Reconstruction and Development; Mr. Yuri
                    Miroshnikov, Ukraine International Airlines; Mr. Jacques Mounier, Corporate and Investment Bank Credit Agricole; Mr. Alexander
                    Rodionov, Procter & Gamble; Mr. Andrzej Rozycki, Cargill; Mr. Floris Schuring, KPMG; Mr. Dmitry Shymkiv, Microsoft.

President:          Mr. Jorge Zukoski
The participants emphasized the vitality of delivering to International Financial Institutions the understanding
that reforms in the energy sector should take into account all sectors, not only oil and gas sector, but also
reforms in distribution and supply of energy as inherent parts of the process.

2.    Update on International Conference «Energy Policy of Ukraine: Unconventional Gas Focus» to be
held in Kyiv on April 20-21, 2011.

The Committee participants noted that the event could be used for providing a platform for an education session
for lower level stakeholders from the Ministries, local governments, NGOs for highlighting environmental and
technological aspects of the unconventional gas development with the focus on specific issues.

Since there is still a lot of misunderstanding among government officials and media representatives about the
development of unconventional gas, the industry leaders can use the session for communicating the important
aspects and voicing the key next steps which should be done by the government in this regard.

Moreover, the Committee members resolved to consider the opportunity of arranging In-Focus Meeting with
relevant government officials and inviting specific industry journalists for providing educational session on the
development of unconventional gas.

3. Update on the legislative developments in the electricity sector, particularly Draft Law of Ukraine #
7420 “On the Amendements to Certain Legislative Acts of Ukraine regarding Arrangement of the
Payments for Services that are Provided by the Subjects of Natural Monopolies” adopted by Verkhovna
Rada of Ukraine in the first reading.

The participants resolved to send prepared by AES Ukraine Chamber position on the Draft Law agreed by
members of Fuel and Energy Committee.

Please click here to view the Letter and Detailed Proposals.

4.    Update on work on the Draft Subsoil Code of Ukraine.

Mr. Oleksiy Tatarenko, Shell, Committee Co-Chair updated the participants on the Working Group on Draft
Subsoil Code of Ukraine activities, particularly meeting with State Geological Service Deputy Head Mr. Sergiy
Radovanov and the agreement to include two Chamber experts into the intergovernmental group on Draft
Subsoil Code, which will start its work after the issuance of the Regulation on Providing Special Permissions
for Subsoil Use by the Cabinet of Ministers of Ukraine.

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In order to access the document, please enter you login and password, then return to the Update and click the
link.




_____________________________________________________________________________________________________________________________________
Board of Directors: Mr. Ian Borden, McDonald's – Chairman; Mr. Boris Krasnyansky, PricewaterhouseCoopers – Vice Chairman; Dr. George
                    Logush, Kraft Foods – Vice Chairman; Mr. Jason Murphy, British American Tobacco – Treasurer; Mr. Jacquot Boelen, METRO
                    Cash & Carry – Secretary; Mr. Didier Casimiro, TNK-BP; Mr. Peter Chernyshov, Slavutich, Carlsberg Group; Mr. Steven Fisher,
                    Citibank; Mr. Walter Gordon, Coca-Cola; Mr. Andre Küüsvek, European Bank for Reconstruction and Development; Mr. Yuri
                    Miroshnikov, Ukraine International Airlines; Mr. Jacques Mounier, Corporate and Investment Bank Credit Agricole; Mr. Alexander
                    Rodionov, Procter & Gamble; Mr. Andrzej Rozycki, Cargill; Mr. Floris Schuring, KPMG; Mr. Dmitry Shymkiv, Microsoft.

President:          Mr. Jorge Zukoski

								
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