Managing Partner Andrii Okhotnikov and Partner Ivan Shyshov share their analysis of Production Sharing Agreements (PSAs) and their potential for the development of Ukraine’s extractive industries – European Pravda.
Ukraine has significant resource potential in oil, gas, and critical minerals. However, resources alone do not create value – capital, technology, management capabilities, and a willingness to assume risk are also required. This is precisely the purpose of Production Sharing Agreements (PSAs): the state provides access to subsoil resources, the investor contributes capital and expertise, and the extracted production is shared under terms agreed for decades ahead.
PSAs are one of the mechanisms that make it possible to combine state-owned resources with private capital and investor expertise. However, Ukraine’s experience shows that signing an agreement is only the beginning of a much more complex process.
As of September 2026, of the 13 PSAs signed in Ukraine, only one project has successfully reached industrial production. Under the 11 agreements signed in 2020–2021, minimum investment commitments exceed $500 million, while, according to publicly available data, actual investment to date amounts to approximately 10% of this figure.
According to the authors, one of the key challenges for such projects today is execution – the ability to turn the right to develop a field and its geological potential into a functioning investment project.
This requires completing the entire project cycle: from due diligence, structuring, and financing to geological exploration, drilling, infrastructure development, engagement with public authorities, and the launch of commercial production.
In wartime conditions, PSA implementation becomes even more challenging. At the same time, war-related risks do not necessarily make a project impossible to implement – to a significant extent, the outcome depends on the investor’s ability to adapt the project model, secure financing, and manage increased operational complexity.
For Ukraine, PSAs can become an important instrument for attracting long-term private capital, developing the country’s domestic resource base, and strengthening energy resilience.
Read more about Ukraine’s experience with PSAs, the reasons behind the slow implementation of projects, and the conditions required to move from an investment agreement to actual production in the full article in European Pravda.
https://www.eurointegration.com.ua/eng/articles/2026/09/21/7245763/
