KIEV, July 16 U.S. energy company Vanco said on
Wednesday it had filed for international arbitration with
Ukraine, after the government cancelled a 30-year licence to
explore and extract oil and gas in the Black Sea shelf.
Prime Minister Yulia Tymoshenko has said Vanco broke
conditions of the agreement, that the company structure was
unclear and has voiced concern that it could sell on the
licences to Russia's gas export monopoly Gazprom (GAZP.MM).
Vanco has denied the allegations.
"We are committed to Ukraine's energy independence that
would be reached through the realisation of this (agreement),"
the president of Vanco's unit in Ukraine, Jim Bown, said in a
"We remain open to dialogue with the government of Ukraine
to resolve issues ... but have also chosen to pursue our right
to protect our investments through the Arbitration Institute of
Stockholm," he said.
Ukrainian President Viktor Yushchenko, long at odds with his
on-off ally Tymoshenko, has sided with Vanco, as has the
prosecutor general and the Security and Defence Council, which
decides issues affecting national security.
Industry sources have said that within Vanco's company
structure in Ukraine lies DTEK, an energy group that is part of
the vast empire of firms belonging to Rinat Akhmetov, Ukraine's
richest man and a leader in the opposition Regions Party.
Tymoshenko has said the Black Sea shelf should be developed
by state energy firm Naftogaz, with potentially a foreign
partner who would get a 30-40 percent stake in a production
Later, Naftogaz suggested that Gazprom could join it in a
joint venture to explore and extract in the shelf.
The contract allowed Vanco to explore and extract in the
Prykerchensky block - an area of just under 30,000 square km at
the northern end of the Black Sea and 13 km offshore.
Vanco had won the initial contract in early 2006 and then
spent 18 months in talks about its details and only received the
go-ahead last October. It had said it would spend as much as $3
billion in the long term.
(Writing by Sabina Zawadzki)