VANCO TO DEFEND ITS POSITION ON PSA WITH UKRAINIAN GOVERNMENT IN COURT, SAYS COMPANY REPRESENTATIVE

Interfax Ukraine Business Express
Kyiv, Ukraine, Thursday, May 22, 2008

KYIV - Vanco Ltd. has not violated its production sharing agreement (PSA) on the Prykerchensky oil and gas field in the Black Sea and is ready to defend its position in court, according to Vanco Prykerchenska Ltd. spokesman Jim Bown.

"We are confident that we will in all of the courts. We have a very strong legal position," he said at a press conference in Kyiv on Thursday.

According to Bown, the company's leadership is open to a dialogue with the Ukrainian authorities, however, the Ukrainian government still refrains from holding official negotiations.

He said that the Cabinet of Ministers had not yet officially informed Vanco Prykerchenska Ltd. about the cancellation of a permit to develop the Prykerchensky oil and gas field issued to the company in December 2007.

According to Bown, Vanco is still interested in developing the Prykerchensky oil and gas field, despite the present problems.

He said that measures taken by the Ukrainian government against the company are undermining the trust of foreign investors in Ukraine.