German industry may not fully recover to levels seen before the energy crisis due to high prices for imported liquefied natural gas (LNG), according to Markus Krebber, chief executive of German energy company RWE.
“Gas prices in continental Europe, and especially in Germany, are structurally higher now because we are ultimately dependent on LNG imports,” he told the Financial Times. – German industry is at a disadvantage.”
Gas prices in Europe have fallen about 90 percent from peak levels seen in 2022, but remain about two-thirds higher than in 2019, the FT wrote, citing data from Argus.
Krebber criticized Angela Merkel’s government’s decision in 2011 to abandon nuclear power without finding an alternative to Russian gas.
“When you know exactly what you want to give up, you should immediately start thinking about introducing new technologies,” he said.
Analysts are pessimistic about the prospects for Germany’s economy, Europe’s largest. According to the assessment of the five leading research institutes of Germany, the country’s GDP in 2024 will grow by only 0.1% due to the decline in exports and weak domestic demand. In 2023, the German economy contracted by 0.3%.
According to S&P Global Commodity Insights, demand for natural gas in the industrial sector in Europe fell by 24% in 2023 compared to 2019. The company’s experts believe that about 6-10% of European demand will be lost irretrievably due to demand destruction.
At the same time, the U.S. has a consistent and comprehensive policy to encourage the return of production capacity to the country, Krebber said. “Europe has the same intentions, but so far there are no proper measures in place,” he added.
A survey by the German Chamber of Commerce and Industry last September showed that 43% of large industrial companies plan to move their business outside Germany, with the US a priority. Last year, German companies announced investments of $15.7 billion in projects in the U.S., compared with $8.2 billion a year earlier, according to fDi Markets.
The number of insurance companies in Ukraine in March 2024 has not changed and as of the end of the month there are 86 risk insurers, 12 specializing in life insurance, one insurer with a special status (“Export Credit Agency”), according to the NBU website. At the same time, two insurance brokers are included in the register.
In general, the number of non-banking financial market participants in March decreased from 1,060 (as of February 29, 2024) to 1,056 (as of March 31, 2024).
The German government will donate about 400 generators to Ukraine to help fight Russian aggression, the German Embassy in Kyiv reports.
“Recent Russian air strikes have destroyed and damaged power plants in Ukraine. Millions of people, especially in Sumy and Kharkiv, were temporarily left without electricity. The German government is supplying > 400 generators to strengthen Ukraine in its fight against Russian aggression,” the statement posted on Facebook reads.
Dynamics of changes in discount rate of NBU – from 2013 to end of 2023
Source: Open4Business.com.ua and experts.news
PJSC Ukrnafta is launching a revitalization program and invites investors to participate in the restoration of the first 20 wells.
“An important part of the company’s strategy to increase production is the restoration of already drilled but abandoned wells that have prospects through the use of modern technologies,” the company said in a press release, citing Ukrnafta CEO Serhiy Koretsky.
Currently, 4222 such wells have been identified, of which 2100 are within Ukrnafta’s special permits, 700 of which are within the reserve contours.
“The company has selected 30 wells out of these 700 for the pilot. 10 will be restored on our own, and a tender is announced for 20. The company invites partners to help restore production at these sites by drilling horizontal sidetracks,” the document explains.
The company offers a deal based on the Risk Service Agreement, under which the investor must pass compliance and get access to the Virtual Data Room with information about the well.
“Ukrnafta, for its part, together with specialists, is forming a pool of wells, from three to 12, which will be restored by drilling at the expense of partners. The cost of restoring production from the wells is determined by bidding in the Prozorro system.
Subsequently, Ukrnafta receives an additional resource and pays for the revitalization using the funds from production from the restored wells. The partners, for their part, receive a share of the additional production from the revitalized wells.
“Any Ukrainian and international company that passes the compliance procedure can join,” the company said.
As reported, in 2023 Ukrnafta increased oil and condensate production by 3% (by 39.9 thousand tons) compared to 2022 – up to 1 million 409.9 thousand tons, gas production by 5.8% (by 60.4 million cubic meters), up to 1 billion 97.4 million cubic meters.
The company’s strategic goal is to double oil and natural gas production to 3 million tons and 2 billion cubic meters by 2027, respectively.
“Ukrnafta is the largest oil company in Ukraine and operates a national network of 537 filling stations, of which 456 are in operation. The company is implementing a comprehensive program to restore operations and update the format of its filling stations. Since February 2023, Ukrnafta has been issuing its own fuel coupons and NAFTAKarta cards, which are sold to legal entities and individuals through Ukrnafta-Postach LLC.
Ukrnafta’s largest shareholder is Naftogaz of Ukraine with a 50%+1 share. On November 5, 2022, the Supreme Commander-in-Chief of the Armed Forces of Ukraine decided to transfer to the state a share of corporate rights of the company owned by private owners, which is now managed by the Ministry of Defense.
At a meeting on Wednesday, the Swiss Federal Council decided to allocate CHF5 billion ($5.53 billion) for Ukraine’s economic development and long-term recovery until 2036 as part of strengthening existing cooperation, the Swiss government portal reports.
“As a first step, it is planned to attract about CHF1.5 billion from the international cooperation budget until 2028. This amount clearly demonstrates Switzerland’s solidarity with the people affected by the war in Ukraine and will increase stability on the European continent,” the statement said.
Citing the World Bank’s estimate, it is reported that the funds needed for reconstruction in Ukraine are estimated at $486 billion (about CHF440 billion). “Switzerland is already supporting projects in Ukraine aimed at restoring the destroyed civilian infrastructure in the energy, roads, and health sectors. In addition, Switzerland and Ukraine jointly launched the process of political recovery on a large scale at the Ukraine Recovery Conference in Lugano in July 2022,” the statement said.
According to the government, Switzerland has already spent about CHF3 billion on these and other measures to support people affected by the war in Ukraine. About CHF425 million of this amount was received from the international cooperation budget, and the rest (about CHF2.5 billion) was spent by the State Secretariat for Migration on reception and support of people with S protection status in Switzerland.
Over the next 12 years, the Swiss Federal Council intends to intensify its support for Ukraine’s recovery and develop cooperation with the private sector. “Given the current financial situation of the Swiss federal government, the Federal Council has proposed a phased approach: support for Ukraine from the international cooperation budget will amount to CHF 1.5 billion by 2028. In 2029-2036, the Federal Council also intends to study support for Ukraine’s recovery from the international cooperation budget until 2028. The Federal Council also intends to explore other sources (other than international cooperation) from which the remaining CHF3.5 billion can be obtained,” the statement said.
At its meeting on Wednesday, the Federal Council also commissioned the development of a program for Ukraine, which should provide targeted and effective support and be based on the seven Lugano principles: partnership, reform focus, transparency, accountability and the rule of law, democratic participation, multi-stakeholder engagement, gender equality and inclusiveness, and sustainability.
