OREANDA-NEWS. June 2, 2008. The Ministry of Environmental Protection is ready to embark on negotiations with Vanco Prykerchenska Ltd (the Virgin Islands) regarding the development of the Prykerchenska area of the Black Sea shelf, as Ukrayinski Novyny agency was informed by the Press Service of the Ministry.

"We are ready for any civilized negotiations and our taskforce is ready to cooperate", the Press Service reported, having failed to specify if the Group had already embarked on the negotiations with the company.

According to the Agency, on April 25, the Ministry of Environmental Protection revoked the license of Vanco Prykerchenska for the development of the Prykerchenska area.

On May 19, the First Vice-Minister, Aleksandr Turchinov, said that the Cabinet of Ministers decided to withdraw from the Production Sharing Agreement (PSA) with Vanco International (the Virgin Islands) that had assigned its rights for the development of the Prykerchenska area of the Black Sea to Vanco Prykerchenska.

On May 21, the Minister of Environmental Protection, Georgiy Phillipchuk, said that the Cabinet of Ministers had not withdrawn from the agreement but just suspended it.

The governmental resolution has not been published yet.

Vanco International, a subsidiary of Vanco Energy Company (the USA), was elected the preferred bidder in a tender for the development of the Prykerchenska area in April 2006. On October 19, 2007, the PSA was signed.

After the license was revoked, Vanco Prykerchenska initiated arbitration proceedings against Ukraine, having asserted that the Cabinet of Ministers had refused to negotiate with the Company.