Naftogaz plans to focus its efforts on the growth of new hydrocarbon resources and, for this purpose, increases the role of the geological direction, the director of the Exploration and Production division of the group, Oleksandr Romaniuk, has said in an interview with Interfax-Ukraine.
“It all starts with geology. We want to create the best geological expertise in the region, we believe that we can do it. We have a strong geological school, which began to be supported by legionnaires, including our guys who worked in Western companies. We now have a new head of the geological direction, who grew up in foreign oil and gas companies. But we do not need expertise for the sake of expertise. We want to radically change the situation with the resource base, so we are changing the structure,” he said.
According to him, in order to gain access to all available geological information and developments of scientists, the group signs agreements with Nadra Ukrainy, the Ukrainian State Geological Research Institute, the Institute of Geological Sciences of the National Academy of Sciences of Ukraine.
“In addition, we attract external expertise, which will help structure and more correctly determine the goals. We have created an expert council on the basis of the division, which attracted people who built the industry and have unique knowledge about Ukrainian subsoil,” Romaniuk added.
The top manager of Naftogaz noted that the group’s priorities are areas where it is possible to increase proven reserves from 50 billion cubic meters, since the company’s existing resource base does not compensate for the natural decline in production.
NJSC Naftogaz Ukrainy and its member companies paid UAH 77.9 billion in taxes and fees to the state budget in January-July 2020 (including the balance of dividends for 2019), the company’s press service has reported.
According to the report, revenues from the group amounted to more than 17% of the total state budget revenues for the specified period.
As reported, NJSC Naftogaz Ukrainy and its member companies paid UAH 121.4 billion in taxes and dividends to the state budget in 2018.
Naftogaz Ukrainy unites the largest oil and gas companies in the country. It is a monopoly for storing natural gas in underground storage facilities, as well as for transporting oil by pipeline across the country.
The Cabinet of Ministers on Wednesday intends to consider a bill on the list of 188 companies prohibited from privatization, according to the agenda of the government meeting. According to the text of the bill, the government allows the privatization of up to 50% of the shares of Naftogaz, Ukrzaliznytsia and Ukrposhta, but proposes to retain the state’s 100% share of corporate rights in National Nuclear Generating Company Energoatom, PrJSC Ukrhydroenergo, NEC Ukrenergo , Skhidny Ore Mining and Processing Plant (VostGOK), and Ukrainian Sea Ports Authority (USPA).
It is also proposed to include the SE Market Operator and the SE Guaranteed Buyer, created by the Cabinet of Ministers in 2019 in order to ensure the operation of the new electricity market, in the list of objects completely prohibited for privatization.
In addition, it is proposed to include in the specified list the state-owned enterprise Document, Ukraina Printing Plant for the production of securities, Kyiv offset factory, and Pivdenne (Yuzhne) Design Bureau.
Naftogaz Ukrainy, following the results of its activities from providing natural gas transit services in January-March 2020, received a positive EBITDA (profit before interest, taxes and depreciation) of UAH 372 million, according to consolidated unaudited statements published on the company’s website.
At the same time, the net income of the company from transit services in January-March 2020 amounted to UAH 10.382 billion.
In turn, according to the report of Gas Transmission System Operator of Ukraine LLC (GTSOU) for the first quarter of 2020, its net income amounted to UAH 14.715 billion (includes not only transit revenues, but also those from provision of internal transportation services).
As reported, the transit contract concluded in 2009 between Naftogaz Ukrainy and Gazprom expired on the morning of January 1, 2020. A new agreement between the companies on the organization of transportation, a transport agreement between Naftogaz and GTSOU, as well as an inter-operator agreement between GTSOU and Gazprom were signed on December 30, 2019.
In June 2020, NJSC Naftogaz Ukrainy will reduce the price of natural gas sold to industrial consumers on an advance payment basis by 20.7% (UAH 849.60) compared to the current month’s price, to UAH 3,256 per 1,000 cubic meters (including VAT).
According to a report on the company’s website, the indicated price is relevant for consumers purchasing gas on an advance payment in the amount of more than 50,000 cubic meters per month, provided that there are no debts to the company and for 100% subsidiaries of Naftogaz Ukrainy.
For other buyers, the price next month will decrease by 19% (by UAH 896.40), to UAH 3,818 per 1,000 cubic meters (including VAT).
Anti-trust agency opens case against Naftogaz for setting prices for households too high
The Antimonopoly Committee of Ukraine (AMC) has opened a case about the possible abuse of monopoly position by Naftogaz Ukrainy when setting natural gas prices for the population from November 1, 2018, the committee’s website reports.
The AMC reported that Naftogaz has special obligations to sell gas to domestic consumers (the public). At the same time, the company sets prices in this market segment based on the price of gas for industry, which it offers.
According to information available to the committee, Naftogaz set prices for industrial consumers higher than those established in a competitive environment, in particular, according to the results of electronic exchange trading on the Ukrainian Energy Exchange and on European hubs with the condition of gas delivery to the Ukrainian border (NCG).
“This may indicate the establishment by Naftogaz Ukrainy from November 1, 2018 of prices for natural gas for the population at a level that could not be established if there was significant competition in the natural gas markets,” the statement said.
