OREANDA-NEWS. January 22, 2010. The tender sale of Ukrainian crude oil at market prices failed to proceed yesterday. The principal participants refused to take part because of the announced condition that the purchased 167.34 thousand tones UNAF oil (with the Company extracting 87% of Ukrainian crude, Privat Group owns about 42% of its share capital and controls the operational activity of this Company) was supposed to be transported from the facilities of Ukrtatnafta (this company is also controlled by Privat Group). Moreover, the Kyiv Administrative Court has suspended the decision of the Government to increase prices for oil to the level of global market prices.

On the background of decreasing gas and oil extraction in Ukraine in 2009, this news seems to be negative for Ukrnafta. Millennium Capital considers that the Company will continue incurring losses until the price for it production is ultimately raised to the market price level. Accordingly, this news will have an adverse effect on the Company’s attractiveness for investors.