Burisma Holdings Limited is an holding company for a group of energy exploration and production companies. It is registered in Limassol, Cyprus, and based in Kyiv, Ukraine. Burisma Holdings has operated in the Ukrainian natural gas market since 2002. It is one of the largest private natural gas producers in Ukraine. It is owned by Mykola Zlochevsky through his company, Brociti Investments Limited.
|Industry||Oil and gas|
|Mykola Zlochevsky (President)|
Taras Burdeinyi (CEO)
Alan Apter (Chairman)
|Owner||Brociti Investments Limited|
First Ukrainian Oil and Gas Company
Burisma was founded in 2002. Consolidation of Burisma Group took mainly place in 2006–2007. It became a major shareholder of Sunrise Energy Resources, a Delaware Corporation, which in 2004 acquired Ukrainian companies Esko-Pivnich and Pari, which owned natural gas exploration licences. In 2009, shares in these companies were transferred to Millington Solutions Limited. However, shortly after Millington ceased to exist and Burisma claimed ownership of those two companies. In 2012, First Ukrainian Oil and Gas Company, Naftogaz Garant and KrymTopEnergoServis became a part of Burisma Group.
In 2014, Burisma signed a cooperation agreement with the national oil and gas company of Kazakhstan, KazMunayGas. In 2016, Burisma bought two hydraulic fracturing (fracking) fleets. In 2017, it bought a 3,000 horsepower Service King Manufacturing SK 3000 drilling rig for US$40 million; it was the most powerful drilling rig in Eastern Europe at the time.
In February 2016, Burisma acquired a 70% stake in KUB-Gas. In 2017, it bought a majority stake in Diloretio Holdings Limited, a company which owned Ukrainian gas companies Systemoilengineering, Naftogazopromyslova geologiya, and Tehnokomservis. Also in 2017, Burisma bought Nadragazvydobuvannya and Gasoilinvest. In April 2019, Burisma acquired Astroinvest-Ukraine, a natural gas trader.
In 2015, Burisma was one of the founders of The International Forum on Energy Security for the Future and partnered the Electric Marathon. In 2017, it signed a partnership agreement with the Atlantic Council to promote anti-corruption measures.
Burisma's primary operations are in Ukraine, supplemented by activities in Germany, Mexico, Italy, and Kazakhstan. It holds 35 gas production licences in Ukraine in Dnipro-Donets, Carpathian and Azov-Kuban basins. Exploration and production activities are carried out in five regions at eight sites. Burisma also provides natural gas well services, including hydraulic fracturing (fracking). Burisma plans to build a liquefied petroleum gas (LPG) plant In Kharkiv with a capacity of 50,000 tonnes per year.
In 2016, Burisma was the second largest privately owned natural gas producer in Ukraine, after DTEK. It accounted for 26% of all natural gas produced by privately owned companies and more than 5% of total gas production in Ukraine. According to the company, it produced 1.3 billion cubic metres (4.6×1010 cubic feet) of natural gas in Ukraine in 2018.
In Kazakhstan, the company has provided drilling services to KazMunaiGas and its subsidiaries, including at the Urikhtau gas field. In Italy, Burisma develops three geothermal power projects in partnership with Gesto Investimento e Gestão.
Burisma's subsidiaries include Esko–Pivnich, Pari, First Ukrainian Oil and Gas Company, Naftogaz Garant, KUB–Gas and Astroinvest–Ukraine. Esko–Pivnich operates in the Kharkiv Oblast and Pari operates in Western Ukraine (Lviv, Ivano-Frankivsk and Chernivtsi oblasts). KUB–Gas operates in Luhansk Oblast, Gasoilinvest in Poltava Oblast, and Nadragasvydobuvannya in Dnipropetrovsk Oblast. Burisma also owned KrymTopEnergoServis, a company which leased three gas deposits in Crimea. However, after annexation of Crimea by the Russian Federation, KrymTopEnergoServis ceased operation as Burisma subsidiary.
Burisma Holdings is owned by Brociti Investments Limited, a Cyprus-based company owned by Ukrainian former politician and businessman Mykola Zlochevsky. Zlochevsky was minister of natural resources under Viktor Yanukovych, the president of Ukraine. Brociti Investments acquired Burisma Holdings in 2011. Before that acquisition, Mykola Zlochevsky and Mykola Lisin each owned a 50% interest in Burisma Holdings. Lisin, a Ukrainian politician, died in a traffic accident in 2011.
Taras Burdeinyi is the chief executive officer of Burisma Holdings, and Alan Apter is chairman of the board of directors. As of 14 October 2019, the members of the board of directors, in order of seniority, are Alan Apter, Aleksander Kwaśniewski, Joseph Cofer Black , Karina Zlochevska, Christina Sofocleous, Riginos Charalampous, and Marina Pericleous. Aleksander Kwaśniewski, former president of Poland, joined the board in January 2014. In February 2016, Joseph Cofer Black, former director of the Counterterrorism Center of the Central Intelligence Agency (1999–2002) in the George W. Bush administration and former Ambassador-at-Large for counter-terrorism (2002–2004), was appointed to the board. Karina Zlochevska, daughter of Mykola Zlochevskiy, was also appointed in February 2016.
In April 2014, Devon Archer, a former senior adviser to the John Kerry 2004 presidential campaign, and Hunter Biden, an attorney and the son of then-US vice president Joe Biden, joined the board. Archer left the company in 2018 and Biden left in April 2019, when his term as a director expired.
Burisma Holdings does not disclose its financial results. It has been calculated, based on a minimal natural gas price, that the company's revenue in 2018 may have totaled at least US$400 million.
Office of the Prosecutor General of Ukraine and National Anti-Corruption Bureau of Ukraine (NABU) have conducted in total 15 investigations on BUrisma's owner Zlochevsky. In 2016, former Prosecutor General Yuriy Lutsenko accused Burisma subsidiaries of conspiracy and tax evasion about one billion hryvnias (US$70 million) in 2014–2015, but later during investigation subsidiaries of Burisma were not mentioned. Tax audit of Esko-Pivnich by the State Fiscal Service found some violations in 2016. As a result, 50 million hryvnias (US$1.9 million) of additional taxes was paid to eliminate criminal charges. In total, Burisma paid additional 180 million hryvnias (US$7.44 million) of taxes to avoid further criminal proceedings. A criminal investigation was conducted if natural resources extraction licenses were issued to Burisma subsidiaries legally during the period Zlochevsky held government office. Although violations of the procedure were established by NABU, the Specialized Anti-Corruption Prosecutor's Office missed procedural deadlines for a lawsuit and the case for nullifying licesenses was dismissed by the court. In October 2019, Prosecutor General Ruslan Riaboshapka announced that all 15 investigation cases will be reviewed.
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