The II Conference of the Ukrainian Association of Geologists began on October 10, 2003, in Kyiv at the National Exhibition Centre Ukrainian House and was dedicated to the preservation of geological heritage as the basis for further development of the geological industry of the country.

The Conference began with an opening speech by Pavlo Zagorodnyuk, the Chairman of the Board of the Ukrainian Association of Geologists.

Report of Pavlo Zagorodnuyk.

The сhairman of the Board of the UAG Pavlo Zagorodnyuk reported that the II Conference of the Ukrainian Association of Geologists took place at the initiative of the organization headed by it and informed on the current work and the main directions of its further activity.

After being organized in February 2000, the Association in May of the same year held the I Conference of the Ukrainian Association of Geologists which openly discussed the need to restructure the exploration industry to the conditions of the market economy, so it can be moved towards new conditions of management, making this transition as less painful as possible. The opinion of geologists was heard in government circles. A special Commission was set up in the Executive Office of the President to deal with the problems of domestic geology. It seemed that it was then, in 2000–2001, that a serious correction of the situation began. The State Geological Service of Ukraine was established. But, unfortunately, there were no significant changes. Today, the geological industry is in decline and, even worse, there is no clear vision and understanding of the future.

The creation of the UAG – the spokesman emphasized – was caused by the need for the unification of geologists working as staff members in various forms of ownership, to restore broken communications and to become a collective voice of the geological public of the country which will be listened to by governmental offices to avoid going different ways when solving a problem. In the USA, for example, the state transferred some regulatory functions to public organizations, and in general, the role of such organizations in the West is extremely significant.

We – pointed out the spokesman – studied international experience – the work of the American Association of Petroleum Geologists, the European Association of Geologists, scientists and engineers, the associate member of which today our Association has become – and finally were convinced that such a national social structure is extremely necessary for us.

Today, in Ukraine, there are 20 regional centres, as well as centres in Kyiv and the Autonomous Republic of Crimea. As collective members of the Association, 12 geological companies, associations and enterprises were included, in particular, the State Geological Service of Ukraine, the Ukrainian Mineralogical Society, the Ukrainian Paleontological Society, the State Commission of Ukraine on Mineral Reserves, State Regional Geological Enterprise Donetskgeologiya, the Scientific Centre for Aerospace Research of the Earth, the Academy of Mining Sciences of Ukraine, etc.

The number of individual members of the Association has already reached 2000, and its number is increasing every day. All individual members are awarded with membership badges and certificates.

To cover the scientific problems of modern geology and to further develop the geological industry, the periodical press organ of the UAG, the journal Ukrainian Geologist was registered. Two issues of this edition have already been published. Each of you have received the second issue today. In our opinion, the journal is a unique publication. After all, as you can see, on its pages, along with official information, industry problems, scientific publications, the materials that express the ‘seditious’ scientific views of authors, popular scientific articles, as well as the history, memories, poetry and prose of our talented colleagues are printed. There is a place for outstanding personalities of the past and our contemporaries. The journal is freely accessible. Dear colleagues, I invite you to cooperate and to publish your works on the pages of the Ukrainian Geologist.

The geological community noted this year to be significant for the entire world of oil and gas industry. 150 years ago, namely in March 1853, in Lviv pharmacy on the Copernyk Street, the first Betty lamp in the world was lit. That invention involved the work of citizens of Lviv, namely Jan Zeh, Ignatiy Lukasewich and master Adam Bratkovsky. In May 2003, the International Congress of oil and gas geologists Polish Oil and Gas Industry in the Energy Sector of the European Union dedicated to this event was held in the Polish city of Krosno. The Ukrainian delegation, which included representatives of the UAG, participated in the Forum.

After an active preparatory work with the involvement of specialists-historians, local historians, geological community of Lviv, with the support of the Lviv regional state administration on October 3, 2003, in Lviv under the auspices of the Association, the International Scientific Conference History, Current State and Prospects of Development of the Oil and Gas Industry of Ukraine in the Context of European Integration was held. At the pharmacy on the Copernyk Street, the UAG opened a memorial plaque in honour of the event, which was the impulse for the development of the oil industry worldwide.

Our industry (and we, of course) is going through difficult times. In the former USSR, the funds from the extracted oil, gas and ore settled a significant monetary fund in the state budget and then were allocated to geology. And the Geological Service in those days had the opportunity to develop dynamically.

Now, in independent Ukraine, everything is changing. We are moving to the Western model of geological production. Now, the state reserves only the regulation of economic expediency of subsoil use and general regional works. This is a geological survey, involving the allocation of promising, in terms of mineral exploration, areas that may be of interest to potential investors. The rest is a detailed exploration and development of mineral reserves given to public and private mining companies. So we are going through a painful transition from state geology to a commercial one. From the times of the USSR, a huge infrastructure has been inherited but budgetary funds for exploration are not enough, and social security has become declarative.

Ukraine is a densely populated country with a large number of industrial giants polluting the environment, but the issue of ecology (and in the future, in fact, the question of survival), unfortunately, has not received the state importance. Ukraine is also an agrarian country. This means that we have to accurately determine what is better and more important for us – to develop mineral deposits or to save precious humus and grow crops on it? We need to think about our land and solve this issue carefully.

The geological industry lacks attention. It is necessary to actively explore the depths. After all, it is a huge resource. Perhaps by global standards, Ukraine is deprived of oil and gas, but as for other minerals, many of the countries may envy us. We need to do more to attract investors. The geological industry should not be considered as secondary compared to metallurgical engineering or chemical industry. It can be high-output and give considerable profits to the state treasury. But it needs to be invested. It is necessary to invest at least what is provided in the budget and not to transfer the residual principle.

It is necessary to establish the rules of work of foreign investors in Ukraine and to achieve its strict implementation. Even small foreign companies for Ukraine are necessary and beneficial. They are working on the restoration of wells to repair and restore them; there is an intensification of production. And this is good because new technologies are coming to the country, albeit gradually, and investments are also increasing. And the same extracted oil and gas remain.

Much of what was proposed at the first Conference was accomplished, but perhaps even more remains without attention.

We have to talk today about the industry stagnation and how inattention and frivolous attitudes to its problems have depleted its growth. The industry is in dire need of restoration. Until this time, the Committee on Natural Resources has not started its work and its head has not appointed, that is, a period of anarchy continues in geology, which is one of the reasons that the industry is not funded.

The creation of the UAG and the performance of the current Conference is for a common goal – geology should not be destroyed. We simply have to find such solutions and arguments, to resort to such actions to make the community listen to us and to be considered at all levels of executive power when it comes to the geological industry.

Report of Dmytro Gursky.

The report Conceptual Framework of the Development Strategy and Reform of the Geological Industry of Ukraine for 2003–2010 at the Conference was made by the сhairman of the State Geological Service of Ukraine Dmytro Gursky.

The spokesman noted that the strategy of development and reform of the geological industry should take into account the objective laws of the state economy, the priorities defined in it regarding the course of European integration, as well as the current realities and opportunities of the industry, geological enterprises and the direction of technological progress. It is very important to ensure the succession of the new strategy and its natural link with the positive achievements of the previous period. The industry should make an appropriate contribution to the promotion of the state’s accession to the European Union and the organization of geological study and subsoil use according to European standards. At the same time, the positive experience of Russia, other CIS countries, as well as the United States should be widely applied. Dmytro Gursky focused on the main results of the organizational changes in the industry for 1991–2002, analysing issues against the background of the general social and economic situation in Ukraine and noting the significant role of the structure led by him in the reforms, in particular, in the development together with the Ministry of Natural Resources and the UAG Concept of reorganization of the geological industry for the period 2000–2005.

From June 2000, the industry reorganization was to be performed in accordance with the Decree of the President of Ukraine ‘On Measures to Improve the Management Efficiency of the Enterprises in the Field of Geology and Subsoil Exploration Survey’. Nadra of Ukraine was established, including 12 geological enterprises and organizations from the management sphere of the Ministry of Natural Resources in April – May 2001. In the measures development for the implementation of the said Decree, there was no clearly defined list of geological enterprises that should be left in the state ownership, and the vast majority of the latter was proposed to be transferred to Nadra of Ukraine. Therefore, to not destroy the geological industry, the State Geological Service had to take many effective measures, as a result of which 12 geological enterprises remaining in the sphere of the Ministry of Ecology and Natural Resources were included in the list of enterprises not subject to privatization.

In 2001–2003, the State Geological Service carried out significant work on the preservation and development of the geological industry as a separate structure of the Ministry of Ecology and Natural Resources and to prevent the distribution of geological enterprises among commercial companies and societies. Now, the optimal number of geological enterprises has not yet been determined, which should have the status of state and not be subject to privatization and the implementation of the necessary volumes of regional and exploratory geological studies should be ensured. This is one of the priorities to be addressed.

Positive results have been achieved through continuous work on status improvement of the management body of geological research in the country.

Speaking about the state of the mineral resource base of Ukraine, the spokesman stressed that in its depths, about 20,010 deposits and mineral occurrences are concentrated. 7,829 of these fields are of industrial importance and are accounted for by the state balance sheet. Ukraine takes a leading position in reserves and production of many of them. It accounts for more than 14% of the world’s iron reserves and more than 40% of manganese ores. Among the CIS countries, Ukraine is the leader in reserves of titanium, zirconium, uranium and lithium. It is rich for non-metallic minerals such as kaolin, graphite, sulfur, rock salt, as well as fuel and energy resources, decorative stones, etc.

Since independence, conditions have been created for the development of gold mining and gold processing industry, as well as rare metals and non-ferrous metals industry. Commercial reserves of platinum group metals exposure in the Middle Dnieper, Kryvorizhsko-Kremenchuk and Krasnogirsk-Zhytomyr zones of the Ukrainian shield are identified. More than 3,000 deposits of non-metallic minerals have been discovered in Ukraine; more than 2,000 of which have been developed and are working for its economy. Considerable reserves of non-metallic raw materials providing mining and metallurgical complexes are determined. Such raw materials can meet the needs of metallurgical enterprises of the European part of Russia, Georgia, and parts of Poland and Slovakia.

Mining, chemical and agro-industrial corporations are provided with their own mineral raw materials. The subsoil of Ukraine contains significant hydrocarbon resources. The initial recoverable hydrocarbon reserves in the subsoil of Ukraine are 8,417.8 million tons, and the remaining undiscovered resources are 4,982 million tons of conventional fuel.

The spokesman noted that the decrease in the financing of exploration prospecting had a negative impact on the growth of minerals and gave eloquent figures. But, despite this, the total reduction of mineral reserves in these years did not happen, because at the same time the mineral raw materials production has significantly decreased.

In recent years, the search for unconventional minerals has intensified, namely copper, lead, zinc, molybdenum, vanadium, gold, rare earth metals, fluorspar, chromium, molybdenum, lithium, niobium, tantalum, phosphates, fluorite, ornamental stone material, etc. The results of these works are very positive. Hydrogeological research has also intensified, and the prospecting workload on underground drinking and mineral water and also on boring artesian wells have also increased.

Since 1991, the mineral resource base in Ukraine has grown and keeps growing.

Turning directly to the question of the reorganization and reform strategy of the geological industry in 2003–2010, Dmytro Gursky once more emphasized that its implementation should be proceeded on the basis of the European standards of work organization for exploration companies while taking into account the experience of activities of the geological departments and enterprises of the countries with a market economy.

Carried out in accordance with the Decree of the President of Ukraine dated 06/06/2003 No. 485, the reorganization of the Ministry of Ecology and Natural Resources of Ukraine created the Ministry of Environmental Protection and the State Committee of Natural Resources of Ukraine. Taking into account the tasks set by the Decree, it is also planned to create the Central Office of the State Committee of Natural Resources (about 160–170 employees). The executive office should include the State Geological Service, the State Service of Ukraine for Geodesy, Cartography, and Cadastre, the State Service of Reserve Management and Studies and two state departments for subsoil use and geological and geodetic control. All of them will perform purely professional functions. As for general functions (economic, accounting, personnel, etc.), they will be assigned to the management, departments and sectors of the Central Office.

This along with the constant increase in the workload on the provision of special permits and the preparation of appropriate accompanying measures (collection, systematization, compilation and examination of geological materials, preparation of packages of geological data and packages of tender documentation, independent legal examination of draft license agreements, translations, etc.) have caused an increase in the responsibility and status of these services. Special permits are issued according to the results of competitions, which also requires a significant investment of time and involvement of a large number of employees; and it is also the basis for the extension of these services’ workforce.

Along with geological control over the study and use of subsoil in subsequent years, it is necessary to strengthen the work on monitoring the implementation of subsoil users license agreements, work performance in accordance with them and the investment of subsoil users in the exploration and extraction of minerals declared amounts. This leads to the need to increase the staff of the geological control service and increase its level of responsibility. Along with the change in the status and level of responsibility of the geological control unit, certain changes in the work organization of the state geological control executive office will be carried out as part of the administration of the committee.

In the next two years, we must move to funding from the state budget for regional geological and geophysical works and the search for mineral resources works that are strategically important for the state’s economy. This means that the exploration of mineral resources will be financed by the enterprises of the extractive industries, mining joint stock companies, firms, private enterprises and entrepreneurs. The Committee shall annually determine the types of regional studies and prospecting works, as well as the list of enterprises that will carry out these works and studies. And only they will be provided with funds from the state budget. Starting from 2008, the list of minerals, the search for which will be financed from the state budget, will be updated and reduced taking into account the need of the state to increase the reserves of relevant minerals.

All geological enterprises under the management of the Committee will be focused on the implementation of regional geological research and prospecting. Accordingly, their organizational and production structures, equipment and appliances necessary to carry out these works will be determined. It was expected that in 2004, on the basis of the state geological enterprises, the state’s scientific and production regional geological enterprises will be created, as well as two new state regional geological enterprises – West and North-East. In the future, six such enterprises will remain in the management of the Committee. They will have the status of state and will be included in the list of enterprises not subject to privatization and will be a part of the scientific and Production Geological Association Ukrgeologiya, maintaining the status of a legal entity, in 2007–2008.

In 2004–2005, on the basis of structural divisions of the mentioned enterprises that will carry out non-core works, seven independent enterprises were to be created with further privatization. It is planned to expand the activities of the state SRDE Geoinform of Ukraine.

In the geological industry, only the Ukrainian Scientific Research Geological Exploration Institutes operates. Today, it performs some types of work, filling needs which the industry does not have. Thus, the results of research to improve the technique, technology and methods of drilling deep exploration wells carried out by the Poltava Department of the Institute can be used mainly by enterprises such as Nadra Ukraine and Naftogaz of Ukraine, and accordingly, they should finance these works. But this is not happening. A significant amount of research of the Dnepropetrovsk Department is also aimed at improving the technique and technology of core boring. It is expedient to reorganize the Department, division or laboratory which will be a part of the Crimean or main office.

West and North-East state research and production regional geological enterprises will be created on the basis of Chernigiv and Lviv departments. Therefore, part of the work and the departments’ employees engaged in regional and exploration geological and geophysical research will become the part of the established enterprises. So the main and Crimean departments will operate as part of the Institute and as departments directly subordinated to the main Department – Departments in Lviv, Chernigivand Dnepropetrivsk. This reorganization will assist in improving the scientific geological research management and the work concentration in the main department so that the structure of the institute meets the needs of the industry. It is also necessary to review the work scope concerning the design of geophysical equipment and machines. This is not the Institute’s specialization. At the same time, the main department should pay more attention to the development of scientific geological research of solid mineral deposits. Development at the Institute of Economic Research is also relevant.

The organizational transformation will require changes to the existing regulatory legal acts and the development of their new versions, as well as new laws of Ukraine. So it will be necessary to approve the list of works that along with regional and prospecting geological researches will be financed from the state budget, to introduce changes to the Regulation on the State Geological Control and the State Information Geological Fund of Ukraine, to prepare regulations on the matters of the State Committee of Natural Resources with Geological Services of other Ministries and Departments.

The creation of an economic mechanism for geological exploration and the use of mineral resources is a problem that needs to be addressed as soon as possible. First of all, it is necessary to review the current procedure for accumulating funds in the state budget with the purpose to finance exploration, to replace the fee for exploration and payments for the use of subsoil with effective forms and calculation methods. Now, the geological information for obtaining a special permit (license) for the use of subsoil is paid with insignificant sums. Meanwhile, tens or even hundreds of millions of dollars are paid for obtaining a license on the mineral deposit development in the countries with market economies. It is time to move to the worldwide practice of payments for subsoil use, that is, to rent payments and royalties, as well as to change the amount of fees for the provision of special permits (licenses) based on the cost of minerals in the subsoil.

Today, the State Geological Service is already working on the unification of payments for subsoil use by replacing the existing system with a single payment for subsoil depending on the field and the type of mineral deposits on the method of determining the market value of mineral resources, as well as the establishment of a criterion for classifying mineral deposits as extractable, hard-to-recover, etc. The procedure for the calculation of license fees for use of subsoil resources on the basis of the market value of the mineral reserves has been revised. These issues are expected to be resolved and the implementation of relevant activities will be organized by 2004.

We hope that 2004–2005 will be the years of fundamental changes regarding economic approaches to geological exploration and subsoil use.

The mineral resource base of the state can enable the functioning of the enterprises which are based on production from mineral raw materials for more than 80%. Therefore, for 2003–2010, the geological sector is tasked to provide the country with its own raw material deposits in order to manufacture products for the proper functioning of industry and agriculture. Now, reserves of the majority of non-ferrous and alloying metals remain acute. Therefore, over the next seven years, considerable attention will be paid to the search and exploration of these mineral deposits in geological studies. Recently, the possibility of creating its own mining and processing industry for the production of metals such as copper, vanadium, gold, rare and rare earth metals, as well as phosphorites, apatite ores and so on have been proved. Consequently, this direction will be given special attention.

The State Geological Service has developed a national program for the development of the mineral resource base of Ukraine for the period up to 2010. It was agreed with the interested central executive authorities, approved by the Cabinet of Ministers and adopted by the Verkhovna Rada of Ukraine in the first reading. In order to provide the national economy of Ukraine with acute shortage of mineral raw materials in the program, the directions of geological study of the subsoil and the corresponding priorities are determined. Today, the world’s fastest growing is the production and consumption of energy resources, alloying metals and certain types of non-ferrous and rare metals, precious metals and diamonds and minerals for agriculture. Taking into account these global trends and the needs of structural restructuring of the economy of Ukraine, the program provides for the main efforts to be directed to the discovery and exploration of new fields of fuel and energy raw materials, namely oil, gas and gas condensate. Special attention will also be paid to mineral raw material deposits having a steady demand in the world market and being able in the near future to increase foreign exchange earnings in Ukraine (titanium, zirconium, decorative-facing materials, kaolin, graphite, etc.) and to manufacture products profitable for trade with the CIS countries (iron and manganese ores, titanium, zirconium, refractory clays, etc). It is also planned to develop the mineral resource base including the most important strategic types of minerals – gold, other precious metals, scandium, lithium, etc. This will allow us to provide our own raw materials for complex science intensive technologies of modern productions and to strengthen the export potential of the state. It is also planned to increase the volume of integrated geological, hydrogeological, engineering-geological and ecological-geological mapping and mapping of the territory. Considerable attention in 2003–2010 will be paid to the technical re-equipment of geological enterprises and the introduction of new advanced technology of work performance.

The implementation of the main activities of the program will provide significant increase in mineral reserves.

Sustainable economic development of Ukraine is determined by the state and development trend of the mineral resources sector. Ukraine’s wealth of mineral resources has provided an objective natural basis for the improvement and further development of the mineral resource base and the economy of the state as a whole. Geologists of Ukraine and the State Geological Service will do everything in their power to create conditions for further effective development of Ukraine.

The Report of the сhairman of the State Geological Service of Ukraine caused a lively discussion.

Greetings from EAGE, Dr. André Hegedush (Eötvös Loránd University)

Dear сhairman, ladies and gentlemen and dear members of the UAG!

I have the honour to congratulate you on behalf of the European Association of Geoscientists and Engineers, or using its well-known abbreviation, on behalf of EAGE.

EAGE is a well-known international association that was originally founded as the society of geophysicists-explorers, but then it was able to overcome the interdisciplinary barriers between geology and geophysics and become an interdisciplinary organization that covers various areas of earth sciences.

The main objectives of the association are as follows: to introduce into practice the achievements of earth sciences and other applied engineering disciplines and to promote innovation and technological progress, the development of exchanges, partnerships and cooperation with those who work in this industry, or in some way connected with the earth sciences.

Establishing links between geologists, geophysicists, geochemists, geologists, engineers and organizations of the relevant profile in Central and Eastern Europe is a special concern of EAGE, and Ukraine does not stand aside from this process. To strengthen the links between researchers, EAGE established a foundation called PACE 10 years ago, or in other words the program of links and cooperation in earth sciences. Thanks to PACE, the association supports a large list of search areas, sponsors individual scientists, as well as professional societies in our region.

EAGE-PACE is working in the following areas:

It sponsors delegates from Central and Eastern European countries at the annual EAGE Conferences, other congresses, symposia and meetings organized by or with the association participation. The terms of our sponsorship are sent in a report and included in the official program. About 50–100 delegates receive this support each year.
We support conferences and symposia organized by companies associated with EAGE. Four to six regional conferences are sponsored annually.
EAGE supports special programs. For example, the project of assistance of Dnipropetrivsk University, on which special journals and monographs were transferred to the library of the mining faculty. Relevant journals were given to UKRSGRI.

In general, when deciding on support, EAGE-PACE prefers companies associated with EAGE, as well as scientists who are the members of the association or related companies.

The next EAGE conference will be held in Paris. I want to encourage you to send your reports, and if there is such a need, to contact EAGE for financial support. I hope to see many of you in Paris again.

I wish you a successful conference!

Greetings from the American Association of Petroleum Geologists (Stephen Sonnenberg, President)

Dear participants of the conference,

As the President of the American Association of Petroleum Geologists, I would like to heartily congratulate the UAG and express my best wishes to its leadership and its members on the occasion of the II Conference of the

Ukrainian Association of Geologists in Kyiv.

The AAPG is proud to recognize the UAG as one of our associate members. We appreciate your dedication to geological science and high standards of professional ethics.

The AAPG is an international geological organization with members from more than 116 countries.

Among its members, you can find leading geologists, geophysicists, heads and managers of geological enterprises, consultants, students and university professors.

45% of AAPG members hold the position of a manager or higher;
AAPG includes more than 2000 students;
28% of AAPG members live outside the US and 53% work abroad;
43% of its members are active in the fields of prospecting and exploration works, and the remaining 18% are involved in the development of oil and gas fields;
Almost 100 local, national and regional geological associations in the world work under the auspices of the association and are represented in the AAPG House of Delegates.

On behalf of AAPG and its Board, members and employees, we congratulate the management, participants, honoured guests and delegates of the II Conference. We hope to continue our mutually beneficial partnership.

With best wishes, Stephen Sonnenberg, AAPG President, 2003–2004.

Petro Demchenko, the chairman of the Board of NJSC Nadra of Ukraine, which includes 12 subsidiaries and one holding company, focused attention not only on issues related to the activities of NJSC Nadra of Ukraine but also on some common problems of prospects for the development of exploration production and geological science of Ukraine.

The activities analysis of NJSC Nadra of Ukraine and its enterprises shows the constant growth of all major geological and technical and economic indicators. Recently, the efforts of the company and its divisions have been focused primarily on the implementation of the state order for the growth of mineral reserves. Subsidiaries opened eight oil and gas fields. However, today, through the reduction of state budget funding, Nadra of Ukraine is forced to reduce the volume of work on some promising sites.

To change the situation, we need to take a number of measures. In particular, to document the provision of State Geological Services with relevant rights to address the issue of the license revocation of the subsoil user, who has a debt for exploration collection, as well as to restore the transfer of revenues from fees for exploration work performed at the expense of the state budget in a special fund.

Another problem is the extremely worn-out and morally outdated equipment. We offer you to consider the possibility of introducing, into the draft Law of Ukraine ‘On the State Budget of Ukraine for 2004’, a proposal to provide the chief administrator of the budget funds with the right to direct up to 15% of the funds intended for geological exploration for the purchase of equipment for technical re-equipment of industry enterprises.

The spokesman also noted the need to create a regulatory framework for the introduction of concession agreements in the development of deposits and settlement regarding the procedure for the transfer of subsoil plots ownership rights in the effective state control over this process. At the same time, we need relevant regulatory legal documents on the procedure for the termination of ownership rights to use the subsoil object through various circumstances. A regulation on state mining audit should also be developed, providing for a transparent decision-making procedure.

Since subsoil plots are one of the main means of production, the mandatory norm of subsoil use should be the cost (economic and monetary) assessment of subsoil objects, which has a regulatory and market form.

It is advisable to create a system of preferences and sanctions for subsoil users in the exploration and development of mineral deposits, which should ensure the completeness and quality of subsoil use taking into account the conditions of environmental protection and public health, as well as compliance with environmental legislation.

It is necessary to develop a state program for the distribution and promotion of public geological information on subsoil projects in Ukraine on investment markets.

Mykola Kravchuk, the сhairman of the Central Committee of the Trade Union of Workers of Geology, Geodesy and Cartography of Ukraine, which in March 2004 was 50 years old and which unites 32,000 members and is devoted to solving urgent social problems of the industry, also gave a speech. Having acquainted the audience with the active work results of the Trade Union, Mykola Kravchuk focused, in particular, on the issue of collective agreements implementation. Recently, at joint meetings of the public services boards and the Presidium of the Central Committee of the Trade Union, the implementation of collective agreements for 2002 and the first half of 2003 were summed up. It was noted that the fulfilment of obligations under the collective agreements of enterprises during this period contributed to the development of exploration production, the implementation of the state order for the growth of mineral reserves and an increase of social protection of exploration.

SE Kirovgeologia, State Geophysical Enterprise Ukrheofizyka and Donetsk State Regional Geological Enterprise have the highest rates of implementation of the provisions of collective agreements and make up 95–98%. Thanks to the cooperative efforts of the administration and the Trade Union Committees of these enterprises, it was possible to reduce forced unemployment, increase labour productivity, achieve wage growth and improve production and living conditions.

At the same time, he noted that there were still many shortcomings in the implementation of collective agreements. So the main task of the Central Committee of the Trade Union and its committees on the ground was to achieve full implementation of all obligations under collective agreements and to implement the decision of the III Congress of the Trade Union in the anniversary year.

Speech by the President of the Ukrainian Oil and Gas Academy Mykhailo Kovalko

Our country has an energy deficit. Only about 50% of the total demand is met by our own energy sources. Private production covers 10–12% of the required amount of oil and 20–25% of natural gas. Therefore, the oil and gas complex of Ukraine is largely dependent on global political and economic trends in the energy sector. But the main prerequisite for increasing our own hydrocarbon production is the presence of a significant resource base. Achieving the highest possible level of provision of private fuel and energy resources is a fundamental task of the national economy of Ukraine.

Despite the economic difficulties of the transition period, over the past five years in Ukraine, as a result of the introduction of measures to improve the efficiency of the use of production and resource base the introduction of new fields, the use of secondary and tertiary methods to increase oil recovery of productive formations made it possible to stabilize its private production of natural gas, oil and gas condensate.

Energy savings should be an important aspect of our work. It is no secret that we spend in several times more energy per unit of gross domestic product than the countries of the European Union and Japan.

The introduction of scientific and technical developments ensures the development of the oil and gas complex through the reconstruction and technical re-equipment of exploration, drilling, oil and gas production and oil and gas processing enterprises, the capacity of the oil and gas transportation system, creating conditions for a more complete extraction from the depths of proven reserves, rational use of hydrocarbon raw materials, using energy-saving technologies and health and environmental protection.

A significant contribution to the development of the fuel and energy complex makes the Academy one of the first in Ukraine’s public organizations, bringing together leading representatives of the scientific and technical intellectuals working in the field of search, exploration, production, transportation and processing of hydrocarbons. In the spring, we celebrated the 10th anniversary of this institution. The Academy was the initiator and main developer of the national program ‘Oil and Gas of Ukraine till 2010’, a number of scientific and technical works, legislative normative documents, in particular ‘The Code of Ukraine on Subsoil’ and the Law of Ukraine ‘On Oil and Gas’. One of its main achievements is the publication of the encyclopaedic six-volume atlas of oil and gas fields of Ukraine. Now, the Academy has a constructive impact on the activities of the oil and gas complexes of Ukraine.

The participation of leading scientists and representatives of oil and gas circles of Ukraine in our conference indicates a significant increase in attention to the complex problems of the modern oil and gas industry of Ukraine and concern about the current situation. The improvement of this situation largely depends on the achievements of our geologists, according to whose forecasts new deposits are being opened.

I am sure that oil geologists will make a significant contribution to the development of the oil and gas complex of Ukraine.

Ihor Solovyov, сhairman of the Board of JSC Concern NADRA (General sponsor of the II Conference of the Ukrainian Association of Geologists), spoke about the activities of the NADRA Group for the production of geophysical, oil and gas and drilling equipment, as well as the provision of services for the exploration and production of oil and gas and noted the significant achievements of the entity. It is primarily mastering the industrial production of Metalist, Stryiskyi Plant JSC, mobile industrial machines of the type AAPG capacity from 10 to 100 t. for the wells workout and work (currently the industrial enterprises of Ukraine, Russia and Azerbaijan supplied about 40 units); rehabilitation and mastering of technologically finished serial production geophysical equipment at JSC Kyiv Plant Geofizprylad (the last four years the plant manufactures more than 300 tools a year and sells them to companies from Russia, Kazakhstan, Azerbaijan, Turkmenistan, and Ukraine). The design bureau of the plant Geofizprylad has developed and prepared for the production a fundamentally new tool – Six Level Tilt Gauge – the use of which will significantly increase the reliability of geophysical surveys of wells in the conditions of complex building of geological objects. In addition, the logging station was designed according to the best world standards. Testing of multi-element acoustic logging equipment has been started.

JSC Ukrpromgeofizyka, established in 1999 as a service logging enterprise, not only has successfully fulfilled the complex of geophysical surveys of wells in Ukraine and Russia but has also introduced new tools manufactured at JSC Kyiv Plant Geofizprylad in production. During the period of work, 60 facilities for testing for industrial inflow were recommended, and 17 of them were tested with 100% efficiency. In February of 2003, the North-Korobychynsk field was discovered alongside a new industrial facility on Maksalskyi field.

In 1998, JSC Ukrnaftogazgeophizyka introduced the modern technology of volumetric seismic survey in Ukraine. About 800 sq km of 3D and almost 3500 lin km 2D of seismic survey have been depleted. The works are fully completed in three sites. The well 180 of Bil’ska field, built according to JSC Ukrnaftogazbank and Ukrndihaz, produced 700 thousand cu m of gas inflow during the tests. The well 102 of Reshetnyakivskyi block of the Poltava Oil and Gas Production Establishment proved to be productive.

The specialists of the NADRA Group developed a project for the pilot operation of hard-to-recover reserves of the Russko-Komarovsky gas field in Transcarpathia and equipped the same. Now, gas is produced and sold there.

Volodymyr Pavlyshyn (Professor, Taras Shevchenko National University of Kyiv), drew attention to the problems of mineralogy in Ukraine and related it to the training of young professionals. In the foreground, he put forward the development of mineralogical research aimed at creating new industries in Ukraine – rare metal, copper, gold (on the mineral resources sector of the Ukrainian shield) and quartz. He also mentioned a number of specific problems without which it would be impossible to effectively solve the practical problems of mineralogy and thus strengthen the economy of Ukraine.

The development of the mineral resources sector of Ukraine is largely a mineralogical problem, now complicated by the lack of an adequate number of well-trained young professionals, scientists and practitioners. If the personnel vacuum is not overcome in the near future, the crisis condition of Ukrainian geology will deepen even more.

Volodymyr Pavlyshyn noted the lack of crystallographic cells in Ukraine and insufficient attention to the study of crystallography in schools of geological profile. And without proper thorough knowledge of the minerals structure, there is nothing to say about qualified mineralogists. UAG should assist to solve this educational problem.

Victor Metalidi (Executive director, Regional Geological Enterprise Pivnichgeologiya) made proposals to improve the work of the state regional geological enterprises. In his opinion, such improvement is possible through a number of effective measures. In particular, it is necessary to transfer the property not directly involved in the geological production of these enterprises to municipal property, which cannot be fulfilled without the addition of existing or the adoption of new legislation. There is an urgent need to reduce tax pressure in particular, the abolition of the payment of additional (up to 30%) 15% of profits as dividends of state-owned enterprises. This will allow each of them to have 100-200 th. UAH annually. It is also necessary to cancel the 4% standard of disabled people employment (at number of 900 people expenses for 2003 will make 400 th. UAH) for the industry enterprises. The positive consequences would include the extension of the powers of the State Regional Geological Enterprise, the delegation of certain functions of the SGS to them (in particular, the monitoring of compliance by subsoil users with the license conditions for the exploration and development of minerals, the agreement on the annual write-off of national importance reserves, as well as the agreement on the registration of works on geological exploration).

Euhen Yakovlev (Doctor of Technical Sciences & Head of the Department of Natural Resources of the Ukrainian Institute of Environmental and Resource Studies at the National Security and Defense Council of Ukraine) devoted his speech to the new factors of influence of the State Geological Service and mineral resources base on the development of the economy and their connection with the national security of the state.

The strategic importance of this issue for the state is evidenced by the fact that only in 2003, the state of the mineral resource base and ways to improve its formation and effective use were considered several times by the National Security and Defense Council of Ukraine, the committees of the Verkhovna Rada and the Cabinet of Ministers.

According to various estimates of experts of the National Academy of Sciences of Ukraine, the cost structure of natural resources of Ukraine – the dominant among them being land and mineral resources and the rest (water, biotic, forest, etc.) – is only about 2%. So the economy of Ukraine, as rightly noted by Dmytro Gursky, has an agrarian and raw character. At the same time, we observe a large level of anthropogenic pressure on landscapes and geological environment; the ploughing of up to 70% of the territory, the presence of up to 400 mining enterprises, violations of the subsoil to a depth of 1 km or more in the square in the tens of thousands of square kilometres, with a total development of about 10% of the mineral resources all indicate the predominant impact on the national security of Ukraine of the sustainable development of its mineral resources in particular, mineral resources.

In this context, there is worry caused by the reduction in almost five times of the numerical composition of the geological industry and the non-rhythmic financing of work on the study of both the resource and geological prospects of the subsoil and their regional environmental status.

In addition, the weakening of the geological industry not only hinders the development of mineral resources but also creates prerequisites for limiting the reserve of its own deposits and the growth of import of raw mineral materials (now, Ukraine imports up to 12–15 million tons of coal; this trend is observed in relation to other raw materials).

This is a very alarming process of the spread of mineral ‘intervention’ and reducing the potential of their own geological works. At the same time, the experience of the State Committee on Mineral Resources ‘Geoinform’ and geological institutes and productions of the State Geological Service and National Academy of Sciences of Ukraine gives grounds to talk about the significant potential of the subsoil of Ukraine regarding non-ferrous metals, rare earths, etc. However, further staff reduction and structural composition of the geological industry and its financing can lead to a critical point beyond which the irreversible process of reducing the directions of geological research and their complexity, technologies and geological schools will begin.

Of course, all the problems at this conference cannot be solved, but their consideration and collective discussion of ways to stabilize the situation and to further develop solutions will provide an opportunity to see the optimal structure of the geological industry as part of the State Geological Service, information and scientific base and regional production units. Moreover, a significant part of the speeches of the participants of the conference testifies to the urgent need to preserve the human, scientific and production potential of the geological industry.

The proposals made in the report of Dmytro Gursky, the сhairman of the State Geological Service, were added to the speech of another spokesmen, Yeuhen Yakovlev. In particular, he proposed on behalf of the conference to address the relevant committees of the Verkhovna Rada, the Cabinet of Ministers and the Executive Office of the President on the guaranteed budget financing of geological research at the state level in Ukraine and the preservation of the organizational structure of the State Geological Service. The leadership of the State Geological Service should intensify work on the assessment and forecast of regional changes in ecological and geological conditions in the developed mining regions.

In conclusion, Yeuhen Yakovlev on behalf of all participants expressed sincere gratitude to the organizers and sponsors of the conference, especially to the сhairman of the Board of the UAG Pavlo Zagorodnyuk.

Professor Leonid Galetsky (Institute of Geological Sciences of the National Academy of Sciences of Ukraine & Doctor of Geological and Mineralogical Sciences) focused on the problems and prospects of mineral resource base development of Ukraine.

Ukraine has embarked on the path of European and world integration and accordingly should take into account the basic ‘rules of the game’ in this area. With regard to the mineral resources sector, this is a global concept of ‘balanced development’, the practical embodiment of which is the process of globalization of mineral resources. Each country must determine its place in this global distribution of minerals and products and its degree of participation in mineral resources sector integration.

It is worthwhile to do the revaluation of all the explored fields and the government’s balance sheet, marking the ‘active reserves’ and primary ore facilities that meet current market criteria and are investment attractive. Their further study and development should be carried out at the expense of the interested consumer. As for the other fields, they constitute the natural potential of the country and should wait for their time.

Scientific geological (first of all, forecasting metallogenic) research should focus on forecasting, prospecting and evaluating rich and quality fields, consistent with international certificates. Therefore, it is necessary to determine the geological conditions of ore concentration and forecast criteria and signs of large deposits. Now, such work is being carried out and interesting and unusual structures are revealed – the so-called end-to-end ore-concentrated megazone activation. We believe that it is here that we can expect rich deposits.

It is necessary to use non-traditional sources of mineral raw materials, especially the so-called technogenic deposits – industrial wastes which in Ukraine have been accumulated to more than 25 billion tons and can serve as an extraction source of many scarce components – rare, non-ferrous and precious metals, iron, manganese and various types of non-metallic raw materials.

The development of technogenic deposits is 5–15 times cheaper than the development of indigenous ores. At the same time, socio-environmental problems in mining areas are being addressed. This area of geological research should become a priority.

The complex study and development of deposits on the basis of modern high technologies and production of high-quality final products competitive in the modern market are required. First of all, it concerns metallurgical production, mechanical engineering and electronic engineering.

The effective use of powerful resources of rare metals in Ukraine, which is known to be the basis of high technology of the 21st century, is an important area that needs to be discussed. The global dynamics of their use is characterized by a significant growth in demand for them and their applications. Ukraine has large and unique deposits of many rare metals, and in this direction, it can take a dominant place in Europe.

An example of a new approach to the modernization of metallurgical production on the basis of its own mineral resources is Illich Steel and Iron Works, whose teams began the development of the Mazurivsky rare-metal deposit in the Pryazovia region. Its effective development is carried out only on the basis of an integrated approach – the production of rare metals, feldspar and alumina products and raw materials for polysilicone. This is possible only on the basis of highly efficient modern technologies and a new economy. The main expected results are the reconstruction of the chemical and metallurgical factory (former Donetsk chemical and metallurgical plant) and the transition to modern technologies and highly liquid products of the metallurgical plant itself.

An indispensable prerequisite for the development and effective use of the mineral resource base of the country is to attract investors, because the state cannot take on all this cargo. So this is the issue for the companies concerned. However, in order to attract investors, it is necessary to create a normal transparent legal framework that would correspond to world practice. For example, a cooperative Canadian-Ukrainian project has recently developed a ‘Model Production Sharing Agreement between the Government of Ukraine and the Investor’. It has already been approved by the relevant agencies and adopted by the Interdepartmental Commission. Work in this direction should be continued.

It is advisable to create an interdepartmental scientific and technological centre that would coordinate, develop and implement these approaches to effective natural resources management.

At the conference, there were also the reports from Bakarzhiev (Executive Director, SE Kirovgeologia), Mykola Gavrylenko (сhairman, Veterans Council of the UAG), Gozhyk (Director, Institute of Geological Sciences of NAS of Ukraine), Gunovska (Head, Laboratory of UKRSGRI), Zaritsky (Professor, Kharkiv University), Krasnozhon (Director, UKRSGRI), Krupsky (сhairman of the Board, NJSC Naftogaz of Ukraine), Liventseva (Deputy Editor-in-Chief, Ukrainian Geologist), Prokopets (Head, Mineralogical Museum of the Kyiv Geological Prospecting and Exploration College), Salamatin (сhairman, Profile Committee of the Verkhovna Rada of Ukraine), Stupka (Academician, UNG), Foshiy (General Director, SE Pivdenukrgeologia), Tsyoha (Chief Geologist, State Geophysical Enterprise Ukrheofizyka), Sheremeta (Senior Geophysicist, Western-Ukrainian Geological Prospecting and Exploration Expedition) and Shunko (Deputy Dean, Geological Faculty, Taras Shevchenko National University of Kyiv).

Resolution of the II Conference of the Ukrainian Association of Geologists

In order to direct the public opinion of the geological community of Ukraine to support the strategy of development and reform of the geological industry of Ukraine for 2003–2010 and to enhance the participation of members of the UAG in the reform of the industry, the II Conference of the Ukrainian Association of Geologists took the following decisions:

To support mainly the conceptual objectives of the strategy for the development and reform of the geological sector of Ukraine for 2003–2010;
To accept the work of the UAG regarding the formation of public opinion on the directions of reforming the geological branch of geological study and subsoil use;
To consider Decrees of the President of Ukraine dated 06/06/2003 No. 485 ‘On the Decision of the National Security and Defence Council of Ukraine’ and ‘On Urgent Measures to Improve the Efficiency of Natural Resources Management in Ukraine’ and dated 09/15/2003 No. 1039 ‘On Measures to Improve the Efficiency of Public Administration in the Field of Environmental Protection and Use of Natural Resources’ and ask the Cabinet of Ministers of Ukraine to take measures to foster its implementation;
To suggest to the State Committee of Natural Resources:
1. Till the end of 2003, to finally determine the strategy of development and reform of the geological industry of Ukraine for 2003–2010, and in the first half of 2004, to submit it for approval to the Cabinet of Ministers of Ukraine
2. During 2004, to prepare and submit for the approval of the Cabinet of Ministers of Ukraine resolution drafts on questions of regulatory legal adjustment of the state financing of regional and prospecting geological studies and also on other questions provided by the strategy of development and reforming of geological industry
3. To foster the preparation of the draft laws approval and regulatory legal acts governing the changes in the economic mechanism to stimulate the optimal organization of geological exploration and use of mineral resources based on market methods of management and
4. To make in accordance with the established procedure to the Verkhovna Rada the draft Law of Ukraine ‘On Amendments to the Law of Ukraine on State Awards of Ukraine’, providing for the establishment of the honorary title Honored Geologist of Ukraine;
5. To contact the Cabinet of Ministers of Ukraine:
  - Regarding the draft resolution on granting permission to use 20% of the funds provided for the financing of geological exploration, for the procurement of the equipment, machinery and mechanisms for the technical re-equipment of geological enterprises and the abolition of the mandatory 4% employment of persons with disabilities in geological enterprises, taking into account the specifics of their work and
  - Regarding the justification of preservation in the state budget of Ukraine of the special fund for financing from it works related to the development of mineral resources base;
6. To take measures in accordance with the established procedure:
  - to introduce at the geological faculty of Taras Shevchenko National University of Kyiv the specialty ‘Geologist-economist’;
  - to organize in the field of retraining and professional development of managers and specialists of geological enterprises.
To apply for a positive resolution of the issues set out in p. 4 of this decision;
To compel the UAG Board:
1. To begin explanatory work on the need to reform the geological industry together with the regional cells in accordance with the conceptual framework of the development strategy and reform of the industry and the direct participation of members of the association in the reform;
2. Systematically publish materials on the reform of the industry in the journal Ukrainian Geologist; and
3. To organize in 2005, the International Scientific Conference ‘European Experience of Geological Achievements Protection. The Creation of the European Network of Geological Monuments (Geosites)’; and
To authorize to sign the Resolution of the II Conference of the Ukrainian Association of Geologists, which was presided by the Congress-сhairman of the Ukrainian Association of Geologists Pavlo Zagorodnuyk.