Discussions Held in Lviv Region on Extraction Revenue Contribution to Development of Local Communities
03 April 2017

A roundtable was held in the city of Zhydachiv, Lviv Oblast, on 30 March, devoted to the topic Extractive Industries Transparency Initiative (EITI) in the Lviv Oblast. How the Distribution of Revenues from Oil and Gas Extraction Will Contribute to Development of Local Communities. The event was attended by heads of six village and amalgamated territorial communities of Zhydachiv raion, representatives of local authorities, EnergoTransparentnist Association, and Zakhidnadroservis Gas Production Company, which operates gas extraction facilities in the Zhydachiv raion.

According to the Chairwoman of the Oblaznytsia Village Council Iryna Motruk, adoption of the Law #1793-VIII “On Amending the Budget Code of Ukraine with Regard to Crediting the Rent for Use the Subsoil Resources for the Production of Oil, Natural Gas, and Gas Condensate” is radically changing the attitude of rural communities to operations of extractive companies in their territories. The communities, Ms. Motruk believes, now have significant incentives to support development of their operations, create favorable environment for attracting investment by such companies, expanding production, and employing local residents.

The Coordinator of the EnergoTransparentnist Association in the Lviv region Vladyslav Deineko notes a growing interest of rural communities in EITI: “People are starting to get interested in the forecasts of development of fields of mineral resources located in their jurisdictions. Therefore, the communities are viewing their future as directly related to the future of extractive companies with which the communities are hoping to build constructive and mutually beneficial relations.”

The Development Director at Zakhidnadroservis Company Taras Fedak, speaking about support of local communities by his company, said: “The distribution of rent for the production of mineral resources according to the Law of Ukraine #1793-VIII will start as of 1 January 2018. However, the company pays great attention to the development of social corporate partnerships with rural communities. For example, the company allocated more than UAH 4mln to support development of infrastructure of rural communities in 2015.” He has noted that Zakhidnadroservis has plans to expand its gas extraction operations in the Zhydachiv raion in the next 20 years; therefore, investment in the development of rural communities is an important component of company’s strategy.

The event was conducted by the BRIT NGO as part of the USAID Municipal Finance Strengthening Initiative (MFSI-II) Roll-out Project.