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Diesel 46.26

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16

Shell: Ukraine Has Bad Energy Investment Climate

"I have doubts whether the energy sector is doing enough to attract the necessary interest for it to achieve its goal of becoming more energy self-sufficient"

A senior Shell official late Monday criticized Ukraine's investment climate saying there were major obstacles to effective oil and gas upstream operations in the country, Platts reported.

"I have doubts whether the energy sector is doing enough to attract the necessary interest for it to achieve its goal of becoming more energy self-sufficient," Patrick van Daele, Shell's general manager for exploration and production in Ukraine, said at a London conference.

Shell formed a joint exploration deal with Ukraine's oil and gas company,
Naftogaz Ukrayiny, in June 2006, but progress since then has been slow.

"In September 2006 we applied to become a tax payer in Ukraine. It took one year for the joint venture to be given the right to become a tax payer," van Daele said.

"That was one year we could not invest in the country, one year lost," he said.

Van Daele said Ukraine had been slow in moving the project forward.

"Frankly, I find frighteningly little actually happening on the ground," he said. "So can I describe Ukraine as having a welcoming investment climate? I don't think I can."