PSA Regime in Ukraine
From 1997 to 2000, we led a multi-stage project to create a legislative foundation for the PSA regime. The RULG - Ukrainian Legal Group (RULG) was retained on this project by the U.S. Department of Energy and USAID, as well as by Europe's TACIS. Over the course of four years, RULG:
- Worked with the international oil & gas industry, the U.S. government and the Ukrainian government's PSA Working Group to draft Ukraine's first PSA Law.
- Provided legal support to the Ukrainian government while the PSA Law was pending and cooperated with the Ukrainian Parliament's Legal Department in shepherding the PSA Law through to successful adoption in 1999.
- Subsequently went through the same process with the Law "On Introducing Amendments to Current Legislation of Ukraine" (the Enabling Law), in order to harmonize the provisions of the PSA Law with existing Ukrainian legislation. The Enabling Law was successfully adopted by the Ukrainian Parliament in 2000.
- After the adoption of the Enabling Law, worked with the Cabinet of Ministers of Ukraine and various Ministries on drafting implementation regulations, a number of which have already been adopted, while others are still pending.
- Has worked with the Ukrainian Parliament on the PSA Law Amendments Bill, aimed at updating the PSA Law.
Our firm prepared a comprehensive report for the World Bank on the application of Ukraine's Production Sharing Agreements (PSA)
Regime to the Use of Subsoil on Ukraine's Continental Shelf.
The text of the report can be downloaded in English and Ukrainian.
RULG attorneys submitted a report on the "Development of the Ukrainian Legislation on Production Sharing Agreements", which was presented at the largest oil & gas trade event in the U.S., the Offshore Technology Conference held on May 3-6, 2004 in Houston. The text of the report is available on this page in
Update on the Status of Ukraine's Production Sharing Legislation
10 December 2012
Production Sharing Agreement (PSA) Law & Recent Amendments so Important - article by Irina Paliashvili published by U.S.-Ukraine Business Council (USUBC).
5 November 2012
On 30 August 2012, a Bill #11119 was registered with the Verkhovna Rada (Parliament) of Ukraine, introducing a number of important amendments into the PSA Law and a few other laws, in particular with regards to the conversion of the existing Subsoil Licenses into production sharing agreements (“PSA”). The Bill accumulates a long list of various amendments proposed in the past few years by the investment and legal community, including by our firm, as well as amendments needed for the Government of Ukraine (“GOU”) to move forward on the two PSAs currently under negotiations (Olesska and Yuzivska).
The new Law "On Amendments to Selected Legislative Acts of Ukraine Concerning Execution of Production Sharing Agreements ("PSA Amendments Law") was recently signed by the President and is expected to take effect soon, introducing a number of important amendments into the PSA Law and a few other laws. The PSA Amendments Law accumulates a long "Wish List" of various improvements proposed in the past few years by
the investment and legal community, including by our firm, as well as amendments needed for the Government of Ukraine ("GOU") to move forward on the three PSAs currently under negotiations (Olesska, Yuzivska and Skyphska). The PSA Amendments Law requires a thorough analysis, but some of its most important highlights are listed
A number of regulations (normative acts)
were adopted by the Cabinet of Ministers of Ukraine on PSA-related
issues. The list of PSA legislation and regulations and a brief description is available for download.
December 6, 2001
The Constitutional Court of Ukraine adopted a Resolution on the constitutionality of selected PSA Law provisions. A summary of this resolution is available for download.
June 8, 2000
The PSA Enabling Law was adopted and took effect. The English translation of
the Enabling Law as amended is available for download.
October 12, 1999
On October 6, 1999, President Kuchma signed the PSA Law. The Law took effect on October 12, 1999, the date of its publication. The English translation of the PSA Law as amended is available for
It is expected that adoption of the PSA Law will put Ukraine back on the radar
screen of potential investors in the oil and gas sector, since the Law creates
attractive conditions for investing. It provides a solid and modern legal
basis for potential PSA projects, and is, in many ways, much more favorable to investors
than the Russian PSA Law. An overview analysis of the PSA Law is available
in the "Publications" section of our Web site.
Although adoption of the PSA Law is a fundamental stage in establishing a PSA regime, a
few more steps still need to be completed before this regime can be effective, including
the adoption of the respective decrees by the Cabinet of Ministers,
and normative acts by various ministries.
Please see our Publications section for our attorneys' published
articles on the PSA regime.
Production Sharing Legislation Seminar in Kiev
On September 14, 1998, the RULG - Ukrainian Legal Group, P.A. conducted a one-day
seminar in Kiev, under the auspices of the Energy Working Group of the United States -
Ukraine Binational Commission, on how production sharing legislation may offer a promising
basis for the extraction of useful minerals from Ukraine.
The goal of the seminar was to offer Ukrainian parliament members, state officials and
specialists in the area of subsoil use, in particular the extraction of oil and gas, an
opportunity to gain a better understanding of how production sharing works in various
countries, and how it could work in Ukraine, as well as to exchange views about the
appropriateness of production sharing agreements to stimulate investment in Ukraine. Below
are selected seminar presentations made by our attorneys.
The Concept of Production Sharing
by Dr. Irina Paliashvili
Survey of Certain Provisions of the Draft PSA
Law and Possible Amendments Thereto
by Tamara Lukanina
Survey of Applicable Legislation of Ukraine in
the Area of Subsoil Use and Relevant Tax Legislation
by Vadim Dmitriev