Ukrgazvydobuvannia in January-July 2021 reduced gross production of natural gas by 5.2% (by 437 million cubic meters) compared to the same period in 2020, to 7.932 billion cubic meters, the press service of the company said.
According to its data, gross production for the seven months decreased by 5.1% (by 406 million cubic meters) compared to January-July 2020, to 7.493 billion cubic meters.
Underfulfillment of the production plan is 125 million cubic meters and 51 million cubic meters respectively
In July 2021, gross gas production decreased by 4.8% (by 57.5 million cubic meters) compared to July 2020, to 1.144 billion cubic meters, marketable – by 4.5% (by 50.8 million cubic meters), to 1.088 billion cubic meters.
To stabilize production indicators during January-July 2021, the company commissioned 25 new wells, carried out 80 well workovers, performed 321 coiled tubing operations, 71 hydraulic fracturing operations, carried out nine sidetracking operations, equipped a remote monitoring system for 197 high-production wells.
As reported, Ukrgazvydobuvannia, 100% of which belongs to NJSC Naftogaz Ukrainy, in 2020 reduced production of marketable gas by 1.2% (by 170 million cubic meters) compared to 2019, to 13.45 billion cubic meters, and the company’s gross production amounted to 14.23 billion cubic meters.
Misen Enterprises AB (Sweden) received $47.06 million from Ukrgazvydobuvannia (UGV), a subsidiary of Naftogaz Ukrainy, in an arbitration dispute over a stake in the Joint Activity in accordance with a ruling by the Kyiv Court of Appeal made on January 5, 2021.
According to the report of Misen Energy AB (publ) on its website, another UAH 1 million was received by another company under its control – Karpatygaz LLC.
Ukrgazvydobuvannia also paid UAH 236.11 million in nonresident income tax to the state budget.
According to the report, this compensation reflects Misen Enterprises AB’s and LLC Karpatygaz’s share of the replacement costs of the equipment subject to the joint ownership under the Joint Activity agreement.
“However, this compensation does not reflect the going concern value of Misen Energy AB (publ.)’s share at the time the exorbitant subsoil use tax was imposed on the Joint Activity, which led to the termination of the Joint Activity Agreement. Misen Energy AB (publ) and its partially owned subsidiaries reserve all their rights in this respect,” Misen said.
JSC Ukrgazvydobuvannia, part of the Naftogaz Exploration and Production division, reduced the production of marketable gas by 0.5% (by 47.8 million cubic meters) in January-September 2020, as compared to the same period last year, to 10.135 billion cubic meters.
Naftogaz noted that it will be more difficult to maintain production at last year’s level in the fourth quarter due to the cumulative effect of negative factors associated with the four months’ lack of approval of the permits required to start drilling, as well as low prices for energy with a consequent reducing of investment in production activities, and a delay of the delivery of equipment and materials due to quarantine restrictions.
In general, it was possible to maintain production volumes over the nine months due to the modernization and construction of ground infrastructure facilities, the implementation of the development program and additional exploration of existing fields, as well as work on new areas.
So, since the beginning of 2020, the divisions of Naftogaz Group have completed the drilling of 27 wells, performed 210 workovers of wells, 75 hydraulic fracturing operations, and 551 coiled tubing operations, completed the reconstruction of four gas treatment units, the construction of four gas pipelines and 66.8 km of plumes.
JSC Ukrgazvydobuvannia in January-March 2020 reduced commercial gas production by 0.4% (by 13.6 million cubic meters) compared to the same period of 2019, to 3.401 billion cubic meters, which was transmitted for the needs of the population and heating companies, the press service of the company said.
Ukrgazvydobuvannia said that it was possible to maintain commercial gas production at last year’s level due to the commissioning of 14 wells, some 158 coil-tubing operations, some 30 overhaul of wells operations and some 29 hydro fracturing operations for three months.
The first deputy director general of the company, Oleksandr Romaniuk, said that the revenues of oil and gas companies will decrease due to reduced demand in the markets, followed by lower oil and gas prices, which will lead to a decrease in investments.
“In addition, due to the coronavirus [COVID-19] pandemic, contractors cannot always follow the contractual terms of work and supplies. Until the end of the year, we will feel the negative impact of these factors on production indicators,” he said.
Romaniuk also said that the recently concluded service contract between Ukrgazvydobuvannia and Expert Petroleum international company will allow involving foreign investment and management practices of the company’s depleted fields in 2020.
The company also continues to modernize its ground infrastructure, in particular it plans to re-equip existing and construct new gas processing plants. Joint projects are continuing with Schlumberger to drill well No. 888 of Shebelynka gas field and Halliburton to rehabilitate wells from an out-of-act ion stock by drilling offshoots.
The Ukrainian government on Wednesday will consider the revised bill on the list of state-owned facilities that are not subject to privatization, which envisages the retaining of at least 50% plus one shares in Ukrtransgaz, Ukrgazvydobuvannia and Ukrtransnafta and 100% in Ukrhydroenergo, Ukrenergo and Energoatom.
According to an explanatory note to the document available at Interfax-Ukraine, after the first consideration of the bill at a meeting of the Cabinet of Ministers on December 27, 2019, a conciliation meeting and a meeting of the government committee took place, as a result of which the lists underwent significant changes.
If in the first version the Ministry of Economic Development, Trade and Agriculture allowed selling up to 50% in all facilities, now their number has been reduced to 22, while for 135 facilities it is proposed to fix all their shares in state ownership.
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.
