Experts presented the study of the most widespread schemes in oil and gas production in the form of table game “Games o Gas Thrones”: Part of the energy market players are feudal lords who believe they may do whatever they like in their patrimonies without any control over them


Kyiv, December 25, 2015. Energy experts presented the study of the most widespread schemes in oil and gas production in the form of table game “Games o Gas Thrones” at a press briefing at Ukraine Crisis Media Center. The work lasted about a year. “In fact, most schemes operating in Ukraine are quite complex because they were concocted by well-educated people. It will take long to unravel these schemes. But we must do it. Otherwise it is impossible to understand where the legislation has some gaps, used for manipulations,” said Olena Pavlenko, President of analytical center DiXi Group. According to her, the study was aimed at disclosing the existing schemes and manipulations rather than at giving the names or punishing someone. Disclosure of such schemes is necessary to fill the “gaps” in the legislation which allow of these semi-legal schemes. The expert informed that the study has revealed more than 10 schemes in the energy sector. They can be divided into the following stages: field selection; operation of a private company including its operation together with the state one to reduce the state budget revenues; taking the fields in which the funds have been invested. “These corrupt schemes often do not require the participation of the top leadership. They can be done with the participation of the mid-level officials and management of public and private companies. If they work together, a “good scheme” can be operated very easily. The courts also play an important role,” the President of DiXi Group informed about the study findings. Based on the study conclusions, the experts suggest that the government officials and journalists should revise rule-making documents and increase the transparency of companies. Otherwise it will be difficult to investigate the scheme and bring it to the law enforcement authority.

Roman Nitsovych, program manager at DiXi Group, explained that the table game was named “Games of Gas Thrones,” because the behavior of many oil and gas industry players resembled characters of the series. “Some players act as feudal lords who believe they may do whatever they like in their patrimonies, including the use of the assets of public companies, without any control over them,” stressed Roman Nitsovych. Accordingly, the player (or several players) chooses which side he takes, throws the dice and passes each path of the schemes to learn what happens in our country. “The schemes are discussed at different levels for a long time. But we want people to “touch”, feel and see what they lose in such schemes,” he explained the idea of ​​the game.

The public supported this study, said Oleksiy Orlovskyi, Director of International Renaissance Foundation program initiative “Democratic Practice,” because the mining industry lacks information transparency and its accessibility to a wide range of people. “The main advantage of this game is that it not only deals with some theoretical aspects, but also analyzes specific examples, cases, persons, companies and entities that have some experience in using one or another scheme and such schemes are openly named here,” said Oleksiy Orlovskyi. The number of schemes will only increase for as long as the information remains undisclosed, he said.

According to Dzvenyslava Novakivska, “Funk & Consulting” representatives, the aim of the project is to turn the game, “cheat codes” which help evade the rules, into the so-called “map of changes”. “If you want manipulate or hide information, pack everything in the law, treaty or any text with lots and lots of letters and sheets that few persons would read to the end,” explained Dzvenyslava Novakivska, calling to seek ways to remedy the situation by revision of laws. In addition, the study revealed that “these” codes” are not in the minister’s portfolio, but in the portfolios of other characters and players. So, rapid changes should not be expected.”

Olena Pavlenko noted that the project developers do not suggest that somebody’s licenses should be withdrawn. They propose to revise the resolution on obtaining the field licenses without auction and to better specify the procedure for holding auctions. They also suggest that information on the contractors should be published to the companies with which they work. Deputy Director of Oil and Gas Industry Tatiana Dovzhok, said that the regulatory framework needs systemic changes. It should prescribe that mineral resources belong to the people of Ukraine. If the work will continue under the existing legislation, the production will continue to fall, believes Tatyana Dovzhok. “We must change approaches to production and set a task to produce our own energy and not to save mineral wealth for somebody unknown. The less we produce, the more we depend on our neighbors,” she said.