Business news from Ukraine

Business news from Ukraine

NAFTOGAZ PLANS TO CREATE IN UKRAINE EXCHANGE TO TRADE WITH GAS

NJSC Naftogaz Ukrainy in 2020 plans to create an exchange to trade with gas, Head of Naftogaz integrated gas business unit Andriy Favorov has said.
“Our idea, our strategy, is that next year we will create an exchange where Naftogaz will act as a buyer and seller of gas,” he said in an exclusive interview with Interfax-Ukraine.
According to him, the decision has already been approved by the board and the supervisory board of the company. The required preparatory work is ongoing to launch the exchange. In particular, a tender was held to implement the ETRM (Energy Trade Risk Management) system, which will take into account all transactions and market fluctuations.
“The introduction of this system will give us the required tools to control commercial risks,” Favorov said.

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UKRAINE INCREASES PRODUCTION OF MEAT AND EGGS IN JAN-NOV

Milk production in Ukraine in January-November 2019 decreased by 3.7% compared to the same period in 2018, to 9.08 million tonnes. According to the State Statistics Service, in January-November 2019, farmers produced 3.05 million tonnes of meat (live weight), which is 5.8% more than in the same period of 2018.
Egg production grew by 3.5%, to 15.51 billion units.

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STATE-RUN UKRGAZVYDOBUVANNIA TO DRILL 80 NEW WELLS IN 2020

JSC Ukrgazvydobuvannia (UGV) in 2020 will drill 80 new wells, Head of Naftogaz integrated gas business unit Andriy Favorov has said. “In 2020, we will drill and launch about 80 new wells. Earlier, to do this without modern drills, the drilling speed of which is two or three times higher than our old drills, was difficult,” he said in an exclusive interview with Interfax-Ukraine.
According to him, the company has changed its approach in this direction, and now it will not drill wells which drilling costs are disproportionate to the investments spent.
Naftogaz is not a charitable organization created to drill as many wells as possible… When we sit down and consider the economic return on our investments, we must be sure that it will be positive. Therefore, the wells that were planned to be drilled in order to increase production “by any possible amount” and their costs at a gas price of $200 per 1,000 cubic meters turned out to be unfounded. Yes, we cut them off. Yes, I will not drill them,” he said.
Favorov also said that on the basis of the analysis, of the existing 3,500 wells in the UGV portfolio, about 1,000 are already at zero production. “They need to be closed and written off, which is what we will do next year. We analyzed another 2,500 and, unfortunately, the most low-risk and most debit works have already been carried out on them in 2015-2016: hydraulic fracturing, coiled tubing, repairs… This lemon is squeezed, plus or minus this story is closed, and we need to move on to the next stage of technically more complex decisions,” Favorov said.
In this regard, the company analyzes deep-hole drilling and development projects for unconventional and offshore gas, to which it is planned to attract international companies with relevant experience. In particular, already in 2020, the UGV plans to drill two exploration wells at the Sviatohirsk field with tight gas reserves.
“We conducted a seismic survey, planned two exploration wells for next year to test our hypotheses. We will not invest billions in drilling without learning the small things, this is stupid. I will not go into details, but in the first half of the year we will test a sufficient number of our hypotheses to be sure that these and other unconventional deposits are economically efficient,” Favorov said.
He also called on the government to actively promote offshore mining.
“We have a great undisclosed potential for the shelf. The UGV has shelf licenses, some are disputed in courts and we have limited work opportunities. If the government is set to increase production, then discussion around the shelf must be mandatory. Unconventional gas, deep drilling and the shelf is a potential, and it must be converted into production,” he said.

ONLINE SALES OF GOODS AND SERVICES IN UKRAINE AMOUNT UAH 76 BLN IN JAN-NOV 2019

The turnover of goods and services purchased online in Ukraine in January-November 2019 amounted to UAH 76 billion, which is 17% more than in the same period in 2018, the EVO group of companies has said.
According to the company, revenue from related services also increased: delivery, advertising, promotion, payments via the Internet.
“Operators earned less than UAH 3.5 billion on the delivery of goods purchased online. About UAH 1.9 billion on online payments. According to the All-Ukrainian Advertising Coalition, revenue from advertising goods and services on social networks, on marketplaces and Internet resources reaches UAH 16 billion, which is 37% more than in 2018,” the EVO press service said.
The company said that on average buyers spend from UAH 200 to UAH 1,000 at a time on EVO marketplaces: Prom.ua, Shafa.ua, Bigl.ua, Crafta.ua, and Izi.ua. The average bill for the year decreased by 7-10%.
“At the same time, the cost of delivery has increased: on average buyers pay for the receipt of goods 5-15% of the cost of goods. By international standards, it is expensive, so the growth rate of the online trading market has slowed down slightly compared to last year,” EVO said.
According to the company, most often in 2019 Ukrainians bought online clothes and shoes, appliances and electronics, consumer goods, cosmetics, and perfumes. At the same time, the fastest growing demand is that for household goods, books, hobby goods, and products for cars.

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DYNAMICS OF BALANCE OF PAYMENTS IN UKRAINE (IN USD MLN)

Dynamics of balance of payments in Ukraine (in usd mln)

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VOLUMES OF CARGO TRANSPORTATION IN UKRAINE IN MLN TONS

Volumes of cargo transportation in Ukraine in mln tons

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