U.S. Ambassador to Ukraine William Taylor calls on the Cabinet of Ministers to reconsider its decision on termination of the product sharing agreement with Vanco International company (Virgin Islands).

Ukrainian News learned this from Taylor's statement.

"We call on the government to reconsider its decision and return to the policy of dialogue so that this very important project in terms of Ukraine's energy security could get back to implementation," Taylor stated.

The ambassador is disappointed with the government decision to terminate the agreement.

In his opinion, in order to lure investors, especially in the sectors vital for energy security, the government should indicate clearly that it respects sanctity of contacts and supremacy of law.

He said a direct discussion between the two sides can remove misunderstanding that lies at the basis of this conflict situation; however, this dialogue did not take place, though it was promised.

As Ukrainian News earlier reported, the Cabinet of Ministers decided to terminate the product-sharing agreement that was signed with Vanco International Ltd (Virgin Islands).

President Viktor Yuschenko set up an interagency working group to investigate whether any laws were violated during the organization of a competition among investors in 2006 for the right to develop oil and gas deposits at the Black Sea shelf's Prykerchenskyi block, which was won by Vanco International Ltd.

The Cabinet of Ministers declared Vanco International Ltd., a subsidiary of Vanco Energy Company (United States), as the winner of the competition for the right to develop the Prykerchenskyi block on the Black Sea's continental shelf in April 2006.

The Cabinet of Ministers and Vanco International Ltd. signed a product-sharing agreement for the Prykerchenskyi block on October 19, 2007.

Vanco International Ltd. later ceded the right to develop oil and gas deposits at the Prykerchenskyi block to Vanco Prykerchenska Ltd (Virgin Islands), whose founders have not been disclosed.

This is one of the reasons for the Environmental Protection Ministry's decision to cancel the Vanco Prykerchenska Ltd's license to develop the Prykerchenskyi block on April 25.

In response, Vanco Prykerchenska Ltd has launched arbitration proceedings against the Cabinet of Ministers.

On May 17, the Prosecutor-General's Office mounted a protest against the Environmental Protection Ministry's cancellation of Vanco Prykerchenska Ltd's license to develop the Prykerchenskyi block, considering the cancellation illegal.

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