Ukrnafta is making every effort to maintain gas production at the Sakhalin oil and gas condensate field in Kharkiv region.
We are convinced that the ruling of the Sixth Administrative Court of Appeal on the appeal of the State Service of Geology and Subsoil of Ukraine, which revoked the Special Subsoil Use Permit No. 6349 dated July 10, 2019, has jeopardized Ukraine's energy security and unfairly restricted the rights and obligations of Ukrnafta.
On May 23, 2023, the Cabinet of Ministers of Ukraine issued Resolution No. 454-r to transfer the assets of PrJSC MC Ukrnaftoburinnya to the management of PJSC Ukrnafta. The government instructed the company to take effective measures to prevent interruption of the operation of the assets and/or the risk of disruption in natural gas supply, which could lead to emergencies.
During this time, Ukrnaftoburinnya, under the management of Ukrnafta, has increased production and earned more than UAH 1 billion in net profit.
On November 28, 2023, the panel of judges of the Sixth Administrative Court of Appeal issued a ruling that ordered PrJSC MC Ukrnaftoburinnya to stop gas production.
PrJSC MC Ukrnaftoburinnya immediately filed a cassation appeal against this decision with the Supreme Court. On December 13, 2023, the Supreme Court, composed of the panel of judges of the Administrative Court of Cassation: judge-rapporteur Stetsenko S.G., judges Tatsiy L.V. and Strelets T.G., issued a ruling on December 12, 2023, refusing to open cassation proceedings on the cassation appeal of PrJSC MC Ukrnaftoburinnya against the decision of the Sixth Administrative Court of Appeal of November 28, 2023 in case No. 2a-7778/09/2670.
The decision of the Supreme Court is motivated by the fact that since the decision of the court of first instance is not in the list of decisions that may be appealed in cassation, as defined by part two of Article 328 of the Code of Administrative Procedure of Ukraine, there are no grounds for opening cassation proceedings against the decision of the court of appeal following the review of the decision of the court of first instance.
Thus, the Supreme Court has denied Ukrnaftoburinnya PrJSC access to justice.
PJSC Ukrnafta supports Ukrnaftoburinnya's position and considers the Supreme Court's reasons to be unfounded, as Article 328 of the Code of Administrative Procedure of Ukraine does not contain any restrictions on appealing against the decision of the court of appeal following the review of the decision of the court of first instance on the reversal of the execution of the court decision. Moreover, the Supreme Court's practice indicates that the cassation review of the appellate court's ruling on such issues is possible.
PJSC Ukrnafta, which has been obliged by the Cabinet of Ministers of Ukraine to maintain the operation of Ukrnaftoburinnya's assets, will take all legally possible measures to preserve the business activities of PrJSC MC Ukrnaftoburinnya, resume payment of taxes to the state and local budgets, and ensure energy security of Ukraine.
PJSC Ukrnafta and PrJSC MC Ukrnaftoburinnya reserve the right to apply to other competent authorities and courts to establish justice in a situation that may lead to irreversible consequences for the country's energy security, state budget revenues and the continued operation of one of the largest gas producers in Ukraine.
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