European Business Association Expresses Concern Over Reorganization of State Geological Service

According to information received from the business community, the Ministry of Economy of Ukraine is actively working on a decision that involves the reorganization of the State Geological and Subsoil Service of Ukraine. As part of this reorganization, a new body is set to be established—the State Agency for Natural Resource Management—which will take over the powers of the existing service.

Companies that are members of the European Business Association have expressed their concerns regarding the potential consequences of this reorganization. In a statement from the business community, it was noted that the initiative to create the State Agency for Natural Resource Management instead of the State Geological Service could negatively impact the stability of the industry, the investment climate, and revenue to the budget.

The Association outlined several risks that may arise from the Ministry of Economy's plans. Firstly, there is a possibility of blocking permitting procedures. During the establishment of the new body, the issuance, extension, and modification of special permits for subsoil use may be suspended, effectively paralyzing the activities of companies.

Secondly, international cooperation may become complicated. The State Geological and Subsoil Service plays a key role in implementing international investment agreements, particularly within the framework of the American-Ukrainian Investment Fund for Reconstruction. Changing the institutional model could jeopardize Ukraine's commitments to international partners.

Thirdly, the reorganization may lead to uncertainty for investors. This could halt the implementation of production-sharing agreements, which are one of the most predictable mechanisms for attracting international investment in the extraction industry.

Moreover, associated geological services could be under threat. The approval of mineral reserves, access to geological information, conducting expertise and research could be halted. The reorganization of the State Geological Service may paralyze the activities of geological enterprises, institutions, and organizations that provide relevant services to subsoil users.

A prolonged transitional period also poses a significant risk. The process of reorganizing the service, transferring functions, property, budget obligations, and reformulating interactions between state bodies may take from six months to three years.

Additionally, there is a risk of losing human resources. During the reorganization, there may be an outflow of experienced specialists from the geological sector, which would negatively affect its development.

It is also worth noting that the reorganization could hinder the development of Ukraine's mineral resource base, including the creation of geological information and maintaining state records of deposits. The activities of the State Geological and Subsoil Service have substantial economic significance. For instance, as a result of auctions in 2025, the state budget received approximately 1.8 billion hryvnias, indicating a stable interest from investors in Ukrainian subsoil resources.

In previous years, the service also ensured systematic budget revenues, issued hundreds of special permits, and increased market transparency by eliminating ineffective licenses. According to the business sector, even a temporary halt in the operations of the agency could lead to a loss of budget revenues, delays in investment projects, and a decrease in trust from international partners.

Representatives of the European Business Association emphasized that in the context of war and attacks on infrastructure, the industry requires stability in government management. The adoption of structural decisions without extensive discussion with the market and stakeholders could have unpredictable consequences.

In this regard, the Association called on the Cabinet of Ministers of Ukraine not to initiate the reorganization of the State Geological and Subsoil Service of Ukraine, but rather to focus on strengthening the capacity of the existing body. Previously, the business community also urged the Verkhovna Rada to adopt amendments to the Subsoil Code.