Project description
and objectives:
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The proposed project consists of a phased equity investment, which will enable the company to explore and develop oil and gas from fields in Ukraine during the next two years and further exploration in these fields.
The company should benefit from existing development wells, proximity to the gas transport infrastructure and the introduction of new drilling technology to successfully produce oil and gas.
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Transition impact:
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Through its investment, the EBRD will support one of the few private upstream oil and gas companies in Ukraine in a sector dominated by state-owned companies. The project will also promote technological and skills transfer as Cadogan Petroleum will introduce new exploration and production technologies in Ukraine and is committed to work with Ukrainian staff and local subcontractors.
Through an envisaged Board representative, the EBRD will promote further improvements in the corporate governance and environmental practices of the company. Cadogan Petroleum’s commitment to high transparency in its operations is evidenced by the decision to adhere to the Publish What You Pay initiative.
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Environmental impact:
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Screened B/1 requiring an environmental analysis, environmental audit and review of the corporate environmental procedures. Main issues that might be associated with the company's operations and facilities in Ukraine are primarily related to the development phase of the gas fields and include disposal of drilling cuttings and drilling mud, soil erosion and reinstatement, increased noise level and land take and compensation. An ongoing environmental due diligence has demonstrated that to date these potential issues are adequately mitigated by a highly efficient drilling mud recycling system and use of water-based drilling mud, careful stripping and storage of the top soil and a thorough land allocation process.
Any environmental, health or safety issues that might arise are also mitigated by the availability and implementation of the Health, Safety and Environmental Policy (HSE) and a comprehensive corporate HSE Management System. The HSE Management System sets HSE standards and expectations and provides the operating companies, business units and any operating locations worldwide with a framework for managing HSE issues. The HSE MS is composed of 12 elements that are grouped into Planning, Implementation, Notification and Reporting and System Improvement.
The company has detailed HSE Management Procedures, HSE Management for Contractors and Standing Instructions for Petroleum. The company shall follow EBRD requirements for public disclosure and consultation for B-level projects, which include a local release of the project summary identifying main environmental issues and proposed mitigation measures, in the Ukrainian language, prior to the Final Review of the project by the Bank. The company shall also commit to and implement an Environmental Action Plan, to be developed on the basis of findings of the EBRD environmental due diligence, and agreed by the company and the EBRD.
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