Argus and UOGA agree on co-operation in energy markets
Global energy and commodity price reporting agency Argus and the Ukrainian Oil and Gas Association (UOGA) have agreed to co-operate in Ukraine’s energy market.
“Ukraine is an important market for us “Argus Media chairman and chief executive Adrian Binks said, speaking from Argus’ headquarters in London. “We have worked closely with Ukrainian customers to develop appropriate services that fit their needs. Our agreement with UOGA will help us bring further transparency to local oil products prices”.
The head of Argus in Ukraine, Irina Petrenko, and UOGA vice-president Oleg Zubchenok discussed the situation in the Ukrainian oil products market and agreed to co-operate. In particular, they decided to co-ordinate their work on developing formula-based pricing for oil products in public procurement as well as for formula-based sales of fuel by state-owned and private-sector companies.
“It is common in many global commodity markets to trade using formula-based prices indexed to assessments provided by international independent price reporting agencies. Such an approach is effective and efficient, and it can reduce the risk of corruption and default in fuel procurement,” Irina Petrenko said.
“The overwhelming majority of companies in the Ukrainian oil and gas market use formula-based pricing in their contracts, a good practice which helps to improve the efficiency of procurement. Major private buyers also choose this option. Therefore, we believe that this approach should be both convenient and cost-effective for state-owned companies and government agencies,” Oleg Zubchenok said.
Argus price assessments are already used for formula pricing in Ukraine. State-owned company Ukrgazvydobuvannya sells A-92 and A-95 Shebel gasoline as well as reformate produced by the Shebelinsky gas processing plant in the Kharkov region under long-term contracts indexed to the Argus Eurobob oxy gasoline benchmark. Prices for gasoline imported into Ukraine from Belarus are also based on Eurobob oxy.
“The use of the formula-based approach makes the price adjustment mechanism absolutely transparent. Ukrainian state-owned companies will be able to buy, and producers and traders will be able to sell, diesel, gasoline, jet fuel, fuel oil and other fuels using Argus price assessments,” Petrenko added.
In addition, Argus and UOGA will co-operate in expanding the use of formula-based pricing for the government procurement of oil products, as well as in industry events and other areas. Co-operation between Argus and UOGA will help to increase the transparency of the Ukrainian market and contribute to the development of the regional industry.
Argus is an independent media organisation with almost 1,000 staff. It is headquartered in London and has 22 offices in the world’s principal commodity trading and production centres. Argus produces price assessments and analysis of international energy and other commodity markets, and offers bespoke consulting services and industry-leading conferences.
Companies in 140 countries around the world use Argus data to index physical trade and as benchmarks in financial derivative markets as well as for analysis and planning purposes.
Argus was founded in 1970 and is a privately held UK-registered company. It is owned by employee shareholders and global growth equity firm General Atlantic.
UOGA is an industry association representing major players in the oil and gas market. Today, the Association includes 14 largest national, international, private and public wholesalers, retailers, producers and refiners such as: WOG, OKKO, Shell, AMIC Ukraine, SOCAR, KLO, Parallel, ZOG, Glusco, Gaztron, Ukrgazvydobuvannya, Tsentrnaftogazpostach, as well as wholesale suppliers BNK-Ukraine and Anvitrade. Association members account for about 50pc of retail and about 80pc of the oil products import market.