The size of Ukraine’s underground economy is too large

According to experts, the underground economy of Ukraine has been estimated at 38.96% of GDP since 1991. This indicator was on the increase to the peak 57% in 1998.

The downward trend continued until 2008, the indicator falling to 36.65%. A financial crisis has caused an increase in the size of the underground economy oscillating between 39.2% and 43.5% from 2009 through 2014. In 2015 Ukraine’s underground economy was estimated at 42.9%. By comparison, the size of the underground economy in developed countries ranges between 7% and 15%.

Ukrainian oligarchs queue up for state-owned enterprises subject to privatization, expert says

According to Vladimir Lanovoy, president of the Center of Market Reforms, the class of oligarchs is being formed in the course of privatization in the Ukrainian style. “The clan of Ukrainian oligarchs and the entourage of president Pyotr Poroshenko, who yearn to become oligarchs, are queuing up for state-owned enterprises subject to privatization,” he said.

Mr. Lanovoy thinks they attempt to seize certain state property while relevant agreements have not been reached yet. “Maybe some oligarchs lack money to buy up everything and a new law does not change anything,” he noted. “This is a cheap trick to allege that the government accelerates privatization. As a matter of fact, oligarchs want to grab and keep all that is left in a legally sound way.”

Ukraine’s exports to China up 11% but…

By Vladimir V. Sytin

Last year trade between Ukraine and China was up 15%, compared with 2016. Today China is one of the top 5 Ukraine’s main trading partners.

Data from the State Statistics Service of Ukraine show that export from Ukraine to China increased by 11% to $2.039 billion. Specifically, this country exports iron ore, grain and foodstuffs to China. As if to rub salt in the wound, however, China’s 2017 trade surplus with Ukraine was $3.608 billion.

According to Nomi Prins, American journalist and public speaker, China continued to stockpile gold in its quest to diversify against the dollar in 2017. China’s Gold Bar Demand rose by more than 40%. It is worth noting too that China leads the world in investment in renewable energy projects with an estimated $32 billion spent overseas.

Ukraine’s large Invest & Trade event held in NYC, Miami

The company A7 GROUP held the fourth forum entitled “Invest & Trade in Ukraine’18” in New York City on March 5, and the inaugural investment forum bringing together Ukrainian and American companies took place in Miami on March 8. The forums in NYC and Miami have become parts of a transatlantic tour. There were discussions and meetings between participants from Ukraine and the United States, international investors and government officials focusing on investment and trade opportunities in the two countries.

Maria Barabash, A7 GROUP president and CEO, noted: “We have been holding these conferences for the fourth time already and we can tell the difference. We are growing, and I would dispute a fact that you watch only the bad news about our country. Ukraine has a great growth potential.”

The format of the forum included two sessions covering energy and infrastructure sectors. Top-flight industry experts made reports about the advantages of trade with Ukraine, investment opportunities, secrets of logistics, new creative Ukrainian projects and more. Among the leading speaker lineup were Andrei Konechenkov, vice-president of the World Wind Energy Association, Igor Smelyansky, acting CEO of the Ukrainian Postal Service, and Leonid Melezhik, president of the MGI Group.

Participants in the discussion showcased new Ukrainian infrastructure projects. Infrastructure minister Vladimir Omelyan spoke about the system Dozorro that was established in Ukraine to exercise public control over purchases. “Called Dozorro, this system is based on Prozorro. It has many functions including sales and privatization,” he said. “The Ukrainian Postal Service is the first player within the Dozorro system.”

As energy was one of the key topics of the event, Aleksandr Repkin, head of the supervisory board at Tokmak Solar Energy, presented the achievements of the Ukrainian solar industry at the forum in Miami. “The renewable sector in Ukraine has been closed for the outside world for a long time because of bottlenecks in legislation. However, we have been changing the situation since 2016, and today we are open to investors.”

To better understand the forums, please click here: a7conf.com/atlantic18/en

KPI researchers work on technology of shielded development of marine bottom gas hydrates by fracking layer

Rich deposits of natural gas and ways for carrying hydrocarbons have become the apple of discord among world energy corporations, giving latent causes for dangerous political demarches and international conflicts. Increasingly, these tendencies are becoming noticeable in view of a lack of easily accessible oil and gas resources.

According to forecasts by the Club of Rome, the reserves of the traditional deposits of hydrocarbons will be exhausted by the end of the 21st century. Current data from ВР Statistical Review show that if development of gas continues at the rates of 2015, its world reserves are supposed to suffice for 52 years and six months. Worthwhile development of energy mineral resources is mostly connected with the innovative technologies of development of shale gas and methane crystal hydrates in the Ocean.

Aggregate reserves of methane gas hydrates exceed considerably prospected conventional reserves of natural gas and are seen as the most powerful source of potential mineral energy resources. If the present-day world consumption of gas remains unchanged, the reserves of methane bottom gas hydrates will suffice for mankind’s needs for several centuries, provided a ‘technological clue’ to their production is discovered. At present, only a part of these formations concentrated along coastland of continents can be considered as potentially commercial reserves. Given the magnitude and prospects of the offshore production of minerals, the Ocean has become ‘space No. 1’ for the mankind by the amount of research, engineering developments and capital investments over the last decade, the above indicators relegating significantly near-earth space programs to the sidelines.

The problem of Ukraine’s energy security is closely connected with an increase in gas production at Ukrainian deposits, which could involve prospected formations of bottom gas hydrates in the Black Sea. According to forecasts, the resources of methane that occur in the formations of gas hydrates near the Crimea alone are estimated at from 20 trillion to 25 trillion cubic meters (reserves in the Black Sea formations total 45–60 trillion cubic meters). While the government of Ukraine approved the program “Gas Hydrates in the Black Sea” in late 1993, an economic recession in the 1990s and latent influence of the suppliers of gas to Ukraine became a brake on planned research and project activities. Ukrainian and German researchers have organized four offshore expeditions from 2002 through 2011 that proved the existence of formations, obtained the first samples of gas hydrates, analyzed the content of extracted gas mixtures and the conditions of the development of formations. Although detailed research on prospective exploitation areas in this country is only at an initial stage, it confirms the high potential of Ukraine’s formations of gas hydrates.

The crucial problem of the successful development of offshore fields is to create the efficient and reliable technology of methane production. Many countries adopted national programs for research on methane hydrates. In 2000 the U.S. Congress had approved the Methane Hydrate Research and Development Act. In 2013 Japan had successfully extracted industrial gas from frozen methane hydrate that is the world’s first offshore experiment producing gas from methane hydrate. Nevertheless, the economically viable technology of the development of the formations of methane hydrates has not been created yet. Moreover, the greater part of offshore fields cannot be developed at all, given the present-day technical situation. This requires the development and approbation of new scientific ideas, methodological recommendations, constructive and technological concepts to establish the wide innovative environment, which would generate solutions to the problem of gas hydrates.

Incidentally, a group of researchers led by Prof. Gennady Gaiko of the Kiev Polytechnic Institute (KPI) have the intriguing concept that provides for practice of a wide-ranging impact on the vast area of the bedding plane or internal structure of a gas hydrate deposit. However, the main idea lies in the formation of the open system of fissures in rocks of the roof of a gas hydrate layer. Released gas flows out through the system to a big gas-collecting blanket that shields the greater part of the bedding plane of a formation.

The proposed techniques of gas production from bottom gas hydrates uncover a new concept of the shielded development of deposits that changes the established approaches to local impacts on a productive layer. Although one of the traditional physicochemical techniques of the development of minerals, namely the well-drilling technology, is seen by the authors as the reliable tool of the dissociation of the vast areas of gas hydrate deposits, it cannot serve at the same time as the efficient tool of the recovery and transportation of released methane. That is why it is worth focusing on an alternative way. What researchers have been always attempting (a priori unsuccessfully) to prevent, namely the penetration of released methane in a water area, should be the target of the main phase of a development technique, making this process manageable and sustainable. The preparatory phase should involve the making of a gas-collecting shield from the elastic blankets that cover the vast areas of a bottom surface above a deposit, collect and accumulate the released methane of a gas hydrate formation. Further, the technique provides for the sustainable removal of recovered gas from several blankets to a bottom pipeline, and the transportation of methane to a coastal gas-distributing station and consumers.

The features of a new approach include the simultaneous dissociation of gas hydrate in the vast area of a gas hydrate deposit and the sustainable removal of the aggregately considerable (sufficient for competitive commercial development) amounts of methane without the threat of an explosive effect. The considerable saving of resources is due to the unmanned technique of the exploitation of a deposit (all expenses and labor resources are concentrated at the preparatory phase of assembling of equipment), as well as to the non-use of highly cost-intensive seagoing ships and offshore platforms during the production of methane.

Elaboration and substantiation of the conditions for the technique of the shielded development of gas hydrate formations may well open up new vistas for the development of Ukrainian and world marine gas hydrate formations.

Currently, the KPI researchers are working on 1) the techniques of washout, explosive destruction and fracking of rocks of the roof; 2) facilities designed for gas dissociation through depressurization, injection of a heat carrier or chemical reagent; 3) design and technology of assembling large gas-collecting shields; 4) system of transportation of gas obtained from a gas-collecting shield through sea-bed pipelines in particular.

The system of shielded development of gas hydrate formations may well become the unique technique of methane production that would require a broad synergy of efforts among concerned partners and investors. The KPI scientists invite all the parties concerned to cooperate on the project with them.

Additional information: ogo55@ukr.net