PJSC Ukrnafta will raise UAH 4 billion in loans from Ukrgasbank to drill new wells and build and commission gas piston units, the company’s press service said on Friday.
“The borrowed funds will be used to finance drilling and production stimulation programs and the construction of modern gas piston stations,” said Sergiy Koretsky, Ukrnafta’s director.
As reported, Ukrnafta has announced 16 tenders for the purchase of gas reciprocating power plants with a total capacity of 63.59 MW-76.4 MW. These are plants with a capacity of 1-1.3 MW (two sets), 1.6-2.1 MW (one), 1.95-2.5 MW (two), 2.4-3.1 MW (three), 2.94-3.7 MW (one), 3.9-4.5 MW (three), 4.4-5.2 MW (one), 5.85-6.8 MW (one), 12-14.1 MW (two). The start of the auctions has been extended by two weeks to September 9-10, 2024.
“In 2023, Ukrnafta increased oil and condensate production by 3% (by 39.9 thousand tons) compared to 2022, to 1.4 million tons. Last year, Ukrnafta produced 1.097 bcm of natural and associated petroleum gas, which is 5.8% (60.4 mcm) more than in 2022.
“Ukrnafta is the largest oil producer in Ukraine and the operator of the national network of filling stations. In March 2024, the company took over management of Glusco’s assets and operates 545 filling stations – 460 owned and 85 managed.
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 NAFTA 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. In November 2022, the Supreme Commander-in-Chief’s Office of the Armed Forces of Ukraine decided to transfer to the state a share of corporate rights of the company, which belonged to private owners and is currently managed by the Ministry of Defense.
Ukrburgaz Drilling Department (a division of Ukrgasvydobuvannya JSC) drilled 40,059 meters in April 2024, which is 24% higher than the previous monthly record set in November-2023 – 32,423 meters.
“Despite the war, we continue to drill new wells, increase gas production, fill underground storage facilities and generally work on increasing production figures,” Naftogaz Group head Oleksiy Chernyshov said, quoted on the company’s website on Wednesday.
According to him, the record figures were achieved, in particular, due to the rapid construction of drilling sites, accelerated work on mobilization of equipment and installation of drilling rigs, as well as clear distribution of special-purpose vehicles to accelerate the start of drilling of 9 wells.
In turn, as the head of Ukrgasvydobuvannya, Oleg Tolmachev, commented, the acceleration of drilling is directly related to improved production performance.
“We have already significantly increased the penetration rate. This year we plan to drill 365 thousand meters,” he noted.
Naftogaz Group increased gas production by 12% year-on-year in the first quarter of 2024.
PJSC Ukrnafta is drilling a new exploration well in western Ukraine, the company’s CEO Sergiy Koretskyy wrote on his Facebook page.
According to him, the total depth of the new directional well is 2,213 meters, and more than 1,000 meters have already been drilled. The work is being carried out with the company’s own rig, which was used to drill the previous well in the same region.
The facility should provide access to two productive horizons. According to the digital 3D geological and hydrodynamic model of the field, the deeper horizon contains 464 thousand tons of recoverable reserves. The shallower horizon has 1.121 million tons of reserves.
“Thus, when we reach the resource at a deeper horizon and when production volumes decline, we can go back higher and give the well a second life with a workover. Such an approach will help the company to use the existing technological resource more efficiently,” Koretsky said.
As reported, Ukrnafta intends to drill nine new wells in 2023 and 30 in 2024. The company’s strategic goal is to double its oil and natural gas production to 3 million tons and 2 billion cubic meters by 2027, respectively. According to the latest forecast, oil production in 2023 is expected to increase by 4% to 1.405 mln tons.
“Ukrnafta is Ukraine’s largest oil producer and operator of a national network of 537 filling stations, of which 456 are in operation.
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 the corporate rights of the company owned by private owners, which is now managed by the Ministry of Defense, to the state.
JSC Ukrgasvydobuvannya plans to start drilling two horizontal wells in 2023, the company’s CEO Oleh Tolmachov said.
“We will start drilling the first two wells this year. We will see the results in 2024. We are working on the technological design of such wells,” he said in an interview with NV.
According to him, horizontal drilling will require additional pumps and other specific points, as well as the import of certain technological solutions. “But 85-90% of the equipment that will be used in this process is already in operation at Ukrgasvydobuvannya,” Tolmachov said.
The UGV CEO estimates the cost of drilling a vertical well with a depth of 4000 meters at about $5 million, while a horizontal well costs more than $25 million.
“But the latter allow us to get high gas flow rates even from tight reservoirs. Ukraine is now in the same situation as the US and Canada were in the late 90s. Our fields are depleted by more than 80%. That’s why we have to drill such unconventional wells, which are more expensive and technologically more complicated. But they produce much more gas,” he said.
Tolmachev believes that investing in gas production in Ukraine is an attractive story, as the price of gas in Europe is 5-6 times higher than in the United States.
“At the same time, Ukrainian projects are similar to those that investors in the United States, Canada, and Saudi Arabia work with. But in terms of economic indicators, they should look much stronger here. So I think foreign partners will be interested in joining Ukrainian gas production,” he said.
According to him, the company has signed protocols of intent with two North American companies, with whom consultations will be held on how to adapt American technologies to Ukrainian realities and technical issues.
“We are also working to gain access to various grants and funds in the US and EU that they allocate for Ukraine. The goal is to present a ready-made story, a financial model with a clear mechanism for field development immediately after the victory, so that foreign companies can invest in Ukrainian gas production,” Tolmachov explained.
As reported, Ukrgasvydobuvannya aims to increase its own natural gas production by one billion cubic meters in 2023 – up to 13.5 billion cubic meters.
“In 2022, Ukrgasvydobuvannya, 100% owned by Naftogaz of Ukraine, produced 12.5 bcm of natural gas (commercial), which is 3% less than in 2021. In 2023, the company plans to increase drilling by 1.5 times compared to last year – up to 300 thousand meters.
PJSC “Ukrnafta” in 2023 plans to increase production of oil gas condensate by 6% compared to last year, the company’s director Sergiy Koretskyy said.
“We have set the task not just to keep the natural production decline, but to increase production already this year by 6%,” he wrote on his Facebook page, without specifying the expected volumes.
According to him, Ukrnafta plans to increase its drilling this year, an ambitious development strategy is being formulated, and goals for buying new licenses have been set.
Koretskyy noted that the company has passed compliance procedures of two state and one private bank, credit lines have already been opened for all three;
In addition, “Ukrnafta” is working on the return of multibillion hryvnia accounts receivable and expects that the optimization processes carried out in a short time will bring hundreds of millions of hryvnia savings in annual terms.
The budget for 2023 was formed with record targets for net profit, he said.
As reported, the Supreme Commanders of November 5, 2022 decided during martial law to withdraw to the state as the military property of the shares “Ukrnafta” (except for the controlling stake in NAK “Naftogaz of Ukraine”). Before the seizure, the structures of Ihor Kolomoyskyy and Hennadiy Boholyubov owned about 42% of Ukrnafta shares.
“Ukrnafta owns 85 special permits for production of hydrocarbons. On its balance sheet there are 1809 oil and 153 gas wells. The company owns 537 gasoline stations, of which 448 were operational at the beginning of February 2023. The rest were either damaged as a result of military operations or are located in the temporarily occupied territories.
DTEK Oil and Gas has completed the drilling of well No. 57 with a depth of 5,270 meters on Machukhske field and received a flow rate of 300,000 cubic meters per day with a significant growth potential.
According to the press service of the company, the well was drilled in conditions of ultra-high reservoir pressures in 136 days, which is 32 days ahead of the planned date.
“During the work, a Bentec-450 t drilling rig equipped with an intelligent top drive system Smart Top Drive was used. The deviated section of the well was built using Schlumberger rotary steerable systems and LWD logging modules,” the company explained.
DTEK Oil and Gas also noted that a new set of research methods proposed by Weatherford was implemented during the work, which made it possible to conduct an additional assessment of the geological structure, confirm the resource potential and plan technologies for further development of the field.
The drilling contractor was Service-Oil LLC.
As reported, DTEK Oil and Gas increased natural gas production in 2019 by 0.7% compared to 2018, to 1.66 billion cubic meters.
