In January-June 2023, PJSC Ukrnafta made a net profit of UAH 14.1 billion, the company’s CEO Sergiy Koretsky posted on Facebook on Tuesday morning.
“Net profit for the first half of 2023 amounted to UAH 14.1 billion. At the moment, net profit has exceeded UAH 20 billion. This is the net profit from business activities, the result after paying all taxes, including income tax. There were no changes in accounting policies,” he said.
According to him, the company’s projected revenue for the current year will be UAH 95 billion, which is twice the average annual revenue over the past decade.
“And the rise in oil prices has nothing to do with it. It’s a transparent market work without intermediaries,” emphasized Koretsky.
The Ukrnafta CEO also clarified that the company paid UAH 12.3 billion in taxes in the first half of the year, including UAH 3.3 billion in income tax. The plan for tax payments for the whole of 2023 is UAH 27 billion, including about UAH 5 billion of income tax.
“For example, over the past 10 years, we have paid UAH 12 billion in income tax. Accordingly, in 2023 alone, the company will transfer five times more money to the state budget than it was on average in 2012-2021,” he wrote.
At the same time, based on the results of its business activities this year, the company is preparing to pay at least UAH 6 billion in dividends if the shareholders’ meeting decides to pay a minimum rate of 30%, which even then will be more than the total result of the last 10 years.
“Ukrnafta is Ukraine’s largest oil producer and operator of 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 currently managed by the Ministry of Defense. In November 2022, Serhiy Koretskyi was appointed director of the company.
In January-October 2023, PJSC Ukrnafta sold 3.7 million non-fuel checks, which is 43% more than in 10 months of 2022, and 7.15 million units of non-fuel products, which is 58% more than in the same period last year.
“In general, the turnover in January-October 2023 increased by 30%, adjusted for inflation,” the company said in a press release on Friday.
According to the company, the conversion rate – the ratio between non-fuel and fuel receipts – increased by 78%, from 0.13 to 0.23.
“Ukrnafta’s goal is to reach a one-to-one ratio in fuel and non-fuel sales. We are developing the network to ensure that customers receive not only European quality Euro-5 fuel, but also all the necessary goods and services,” the company said.
As reported, Ukrnafta, which has been fully controlled by the state since the end of 2022, has set a strategic goal to double oil and natural gas production to 3 million tons and 2 billion cubic meters by 2027, respectively. In 2023, the company plans to increase oil production by 5.8% year-on-year to 1.447 million tons and gas production by 0.3% to 1.04 billion cubic meters.
“Ukrnafta holds 87 special permits for hydrocarbon production.
Ukrnafta’s network of filling stations includes 537 stations in almost all regions of Ukraine. Of these, 456 are operational. The company is implementing a comprehensive program to restore operations and update the format of its filling stations.
NJSC Naftogaz of Ukraine owns 50% + 1 share in PJSC Ukrnafta.
PJSC Ukrnafta and the American Petroleum Institute (API) have signed a memorandum of understanding, according to which the company will have access to API standards agreed by the global industry community.
“Our experts will take part in meetings and working groups focused on developing and discussing top international practices. API and Ukrnafta will be able to jointly organize standardization, training, certification and safety events,” the company said in a press release on Friday.
According to the document, citing Ukrnafta CEO Serhiy Koretsky, this is the most strategic step for the national oil industry in many years of its existence.
“The Ukrainian oil and gas industry has a glorious history, strong experience and great development prospects. However, we have long been dependent on Soviet, Russian and Belarusian equipment. The API Memorandum should change this for good,” the CEO said.
The signed agreement confirms the commitment of both parties to strengthen Ukraine’s energy independence and its move away from Russian standards, equipment and operations.
According to the press release, quoting API Senior Vice President of Global Industry Services Anchal Liddar, API, as the world’s premier standard-setting organization for the natural gas and oil industries, is honored to begin a new cooperative relationship with Ukrnafta.
“This alliance reinforces our shared vision of strengthening Ukraine’s energy infrastructure and independence based on our world-class standards,” said Liddar.
For his part, according to the Ukrnafta CEO, the memorandum actually opens the door to the future for the company.
“We will be able to exchange information about annual programs, plans for the development of standards and best practices, which will allow us to understand how the world will develop and what Ukrnafta needs to do to be on the same page with the benchmarks that drive progress in the oil and gas industry,” Koretsky explained.
It is noted that the memorandum of understanding with API will allow Ukrnafta to significantly increase its efficiency and attract the best examples of world technologies to the development of the Ukrainian oil industry.
“This is one of the key projects of the company’s transformation in the coming years, which will allow Ukraine to gain the desired energy independence,” the press release says.
API was established in 1919. Since then, the organization has developed more than 800 standards to improve operational and environmental safety, efficiency, and sustainability.
Currently, API represents all segments of the American oil and gas industry. About 600 members of the organization produce, process and distribute most of the energy in the United States and participate in the API Energy Excellence® program, which accelerates progress in environmental and safety protection through the introduction of new technologies and transparent reporting.
PJSC Ukrnafta has designed and built platforms with removable base supports for well workovers on its own.
“The maximum load on the rotor table that the platform can withstand is 60 tons, which is enough to accommodate all the necessary equipment, even with a reserve,” the company said in a press release on Thursday.
The design allows for comfortable and safe working conditions for employees and reduces the cost of hoisting operations during repairs.
According to the company, the order for the Ukrnafta Drilling well workover and underground repair shop was made at the production base of Ukrnafta’s Oilfield Service Department (OPSD) in Dolyna, Ivano-Frankivsk region.
“The design took into account all the technical and technological requirements, as well as the specifics of use – both in well conditions and during transportation,” the company said.
The teams at the production base in Dolyna have been working on the project for several months.
Currently, two workover platforms have already been manufactured, and plans for this year include the manufacture of two more similar platforms for current well workovers.
PJSC Ukrnafta is waiting for applications from potential partners for the joint development of 21 fields by January 10, 2024, the company’s press service reports.
According to the company, these are 10 fields in the west and 11 in the east of Ukraine.
It is specified that Ukrnafta plans to fully unlock the potential of its fields with sufficient reserves but low production rates, so it expects its partners to be ready to invest funds and technologies in exploration and production.
“If we talk about 2P reserves, i.e. proven and probable reserves, it is more than 12 million tons of oil and more than 31 billion cubic meters of gas,” said the company’s director Sergiy Koretsky.
According to the press release, Ukrnafta has already prepared draft contracts based on the best international practices. Preference is given to Product Sharing Agreements. The company’s contribution will be the field and the right to use the existing production infrastructure, while the partner’s contribution will be a field development plan to intensify production and finance the relevant works.
The algorithm for applying and selecting potential investors is as follows: candidates declare their interest, go through compliance procedures, get access to the Virtual Data Room with detailed information about the fields, and submit proposals for development plans and terms of cooperation.
Ukrnafta then evaluates the proposals, negotiates and selects the winners separately for each field. The parties then agree on the final text of the production sharing agreement, followed by the Cabinet of Ministers, after which the development plan is implemented.
Profits will be distributed according to the agreed terms.
As reported, Ukrnafta, which has been fully controlled by the state since the end of 2022, has a strategic goal to double oil and natural gas production to 3 million tons and 2 billion cubic meters by 2027, respectively. In 2023, the company plans to increase oil production by 5.8% (by 0.077 million tons) compared to last year to 1.447 million tons, and gas production by 0.3% (by 0.003 million cubic meters) to 1.04 billion cubic meters.
Ukrnafta and SOCAR have agreed on the mutual circulation of fuel cards in their networks by signing an agreement on an inter-member program.
According to Ukrnafta’s press release, legal entities holding its NAFTACard and SOCAR’s sCard with a cash deposit can get the required amount of fuel at both networks with discounts from the price of the filling station on the date of their visit.
Payment is made using funds on the accounts linked to the fuel cards.
“This allows the customers of both companies to expand the geography of their filling stations: Ukrnafta’s network now has 456 filling stations, and SOCAR’s network has 57. So, no matter where you are, you can always fill your car with quality fuel at a favorable price,” the press release says.
As reported, at the end of September this year Ukrnafta started working with BVS (75 filling stations), VST (88 filling stations) and Ovis (43 filling stations) networks in the field of fuel cards.
“Ukrnafta is the largest oil company in Ukraine and operates 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 to the state a share of corporate rights of the company owned by private owners, which is now managed by the Ministry of Defense.
