On 6 December 2018, the State Geological Service announced the 2019 Round 1 for 10 onshore blocks located in five regions of the country and covering over 1,810 sq km. Further rounds will be held in the future as part of a planned total offering of 30 blocks to be conducted on a competitive basis. Round 1 bidders have 90 days to submit applications and the auction is to be held on 6 March 2019. The bid information document reveals the following details: ->The total area of the 30 blocks is 4,630 sq km.->The total number of concession blocks will be auctioned in a series of competitive licensing rounds.->All blocks are located in proven petroleum provinces with well-developed midstream infrastructure and extensively covered by geophysical surveys.->Licences for nine of the 10 blocks have a contract duration of 20 years. The remaining block (Suvorivska) has a 5-year exploration period.->There are minimum exploration program requirements for each block. Exploration work programs are divided into an initial 12 months (seismic reprocessing), followed by a second 12-month period (seismic acquisition) and then a 24-month period (typically one well) or a 1+1+2 sequence.->The prospective resources of the 10 blocks are estimated by the authorities to be 86.25 billion cubic metres of gas and 16.29 million tonnes of liquids. One block (Dubrivsko-Radchenkivska) has developed proven oil and gas reserves.->The initial price of most of the licences does not exceed US$ 0.7 million.->The highest bid in terms of a cash bonus will be awarded the block. While no fiscal terms have so far been revealed for the round, from recent developments it is probable that the following applies for concession agreements: ->The current production tax rates (royalties) apply:->Gas production from reservoirs shallower than 5,000m - 29%.->Oil production from reservoirs shallower than 5,000m - 29%.->Condensate production from reservoirs shallower than 5,000m - 45%.->Gas production from reservoirs deeper than 5,000m - 14%.->Oil production from reservoirs deeper than 5,000m - 14%.->Condensate production from reservoirs deeper than 5,000m - 21%.->In December 2017, amendments to royalty rates for gas and condensate production from "new wells" from 1 January 2018 are as follows:->Gas from deposits entirely or partly at a depth of up to 5,000m - 12% (from 29%).->Gas from deposits entirely or partly at a depth of more than 5,000m - 6% (from 14%).->Condensate from deposits entirely or partly at depth of up to 5,000m - 29% (from 45%).->Condensate from deposits entirely or partly at depth of more than 5,000m - 14% (from 21%).->The general corporate income tax rate is currently 18%.<P /><P />
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