DTEK is considering the possibility of expanding its oil and gas business in Ukraine, CEO of the company Maksym Timchenko has said in an interview with the Ekonomichna Pravda edition.
“We are constantly studying the deposits of all available players on the market. That is, we are open to expanding our business, without exception, with all players, including state-owned companies. If there are such opportunities not only for acquisitions, but also for joint activities, some kind of joint projects in exploration and production, we are ready for this,” he said.
According to Timchenko, in particular, the assets of Geo Alliance group for DTEK are “a potential area of our interest.” At the same time, he did not comment on the details of the negotiations.
As reported, in 2020 DTEK Oil and Gas increased natural gas production by 10.8% (by 180 million cubic meters) compared to 2019, to 1.84 billion cubic meters. In 2021, the company plans to increase gas production to 2 billion cubic meters.
Geo Alliance produced 203 million cubic meters of gas in 2020.
Geo Alliance is under the mandate of the international investment and consulting group EastOne, which unites the assets of Victor Pinchuk. In 2012, EastOne announced a strategic partnership between Geo Alliance and Arawak Energy Ukraine BV, part of the Vitol group of companies, one of the largest operators in the world energy market.
DTEK Grids LLC on April 30, 2021 entered into an agreement for the sale and purchase of 24.5% of shares in PJSC Kirovohradoblenergo, which belongs to VS Group Management LLC from the VS Energy Group and related companies, and is considering the possibility of acquiring a controlling stake of shares of this enterprise upon approval of the relevant transaction by the Antimonopoly Committee of Ukraine.
“DTEK continues developing its electricity distribution business. The company views it as promising and important for the transformation of the Ukrainian power market,” the company said in a statement on Friday.
Currently, the VS Energy group also includes Khersonoblenergo, Zhytomyroblenergo, Rivneoblenergo and Chernivtsioblenergo. In 2019 VS Energy sold Kyivoblenergo and Odesaoblenergo to the DTEK group.
In January, VS Energy announced a compulsory squeeze-out of Kirovohradoblenergo shares from minority shareholders, following the similar actions at Khersonoblenergo and Chernivtsioblenergo. According to the document, the highest price at which the applicant or persons affiliated with him acquired the issuer’s shares over the past 12 months was UAH 1.30. The market price of the Kirovohradoblenergo shares as of December 22, 2020, set by the appraiser of FC TITAN LLC, was UAH 1.26.
The total number of Kirovohradoblenergo shares is 119.376 million.
DTEK Grids said that it plans to implement a comprehensive program for the modernization of existing assets, as well as to carry out system automation and digitalization of power grid management in Kirovohradoblenergo, DTEK Grids CEO Ivan Geliukh said. According to him, this will improve the reliability of power supply, reduce losses and improve the quality of customer service in Kropyvnytsky and Kirovohrad regions.
According to the company, today, the market for supplying electricity to customers is completely competitive, the national regulator NEURC controls the work of distribution system operators, imposing an obligation on them to unconditionally provide access to the network infrastructure to any electricity supplier. “Thus, the concentration of new assets by DTEK complies with the legislation and the right of customers to have an opportunity of choosing who they buy electricity from in the market,” DTEK Grids said.
The company is developing a business for the distribution of electricity and the operation of power grids in Kyiv city and region, Dnipropetrovsk, Donetsk and Odesa regions. Its enterprises service 5.4 million households and 150,000 enterprises.
In 2021, DTEK Energo intends to allocate UAH 2.3 billion for current, medium and overhaul repairs of power units of its TPPs, the press service of the company said.
“This will reduce the accident rate of equipment, which was observed in this heating season due to the very high load at TPPs, and ensure stable operation in the power system,” the company said.
In March, four power units out of 29 planned for 2021 have already entered scheduled repairs. The task of workers of repair enterprises and power engineers of Burshtynska, Dobrotvorska, Kurakhivska and Luhanska TPPs is to repair technological and electrical equipment, heating surfaces of boilers, on which fistulas often appear, and also to diagnose metal structures.
In the spring, DTEK Energo is planning another seven ongoing and one major overhaul at its TPPs.
According to DTEK Energy CEO Ildar Saleev, due to the fact that the peak of the heating season in 2020/2021 has already passed, the load on the units has decreased and there is no need to work with a full set of equipment, the company has started a repair campaign to prepare for next winter.
“This winter has once again shown the need for shunting thermal generation by DTEK, which again lent a shoulder to the power system. The load of this heating season was 50% higher than the previous one, as well as, unfortunately, the accident rate. Due to the repair of the nuclear power plant, our stations worked with their full complement and promptly responded to the needs of the power system. If one power unit went into emergency repair, then we quickly compensated for the need by launching another,” he said.
At the same time, Saleev said that in order to stop the trend of accidents, it is necessary to stabilize the situation on the energy market, solve the problem of accumulated debts, and provide financial opportunities for generating facilities for repairs.
DTEK Energo is an operating company responsible for coal mining and power generation in the structure of the DTEK holding.
In January-February, DTEK lost UAH 1 billion in profit due to underproduction of electricity due to the coal shortage, Head of the Verkhovna Rada Committee on Energy and Housing and Utility Services Andriy Gerus (Servant of the People faction) said.
According to the MP, out of 777 million kWh of total electricity imports to Ukraine in January-February, DTEK could independently generate at least 500 million kWh, which required 250,000 tonnes of coal.
“Taking into account the premium electricity prices in January-February, this means a profit of at least UAH 250 million. However, this profit was not earned due to the coal shortage,” Gerus said.
In January-February, DTEK actually suspended exports of electricity to the EU, which meant an underproduction of another 800 million kWh (for which 400,000 tonnes of coal were needed), and it is a shortfall of about another UAH 800 million, Gerus said.
“Thus, in order to produce the necessary electricity for the needs of Ukraine and for export, DTEK needed 650,000 tonnes of coal. We remind you that the company’s accounts in December had UAH 1.6 billion, which is the equivalent 800,000 tonnes of coal. In fact, the company lost about UAH 1 billion in profit, which it could have received in January-February, the market provided such opportunities,” the head of the parliamentary committee said.
As reported, the National Commission on State Regulation in Energy and Utilities (NEURC) at a meeting on March 10 fined DTEK Zakhidenergo, DTEK Dniproenergo and DTEK Skhidenergo for UAH 1.7 million each for failure to provide the guaranteed coal reserves at thermal power plants (TPPs) in winter, as well as untimely informing the Energy Ministry, NEURC and NPC Ukrenergo about a critical situation with fuel.
DTEK Renewables and the Danish company for the production of wind turbines Vestas have signed a contract for the construction of phase one of DTEK Tiligulska wind power plant (Mykolaiv region) with a capacity of 126 MW.
According to a press release from DTEK, Financing for the first stage will be drawn from funds raised by DTEK Renewables Finance BV’s green bonds issued in 2019 for an amount of EUR 325 million and with maturity of five years.
“When, in 2019, the first green eurobonds of DTEK Renewables were listed on the European stock exchange, we, as a company, took responsibility for implementing projects in Ukraine… In fact, this is our message to the world: Green energy in Ukraine has a future,” DTEK Renewables CEO Maris Kunickis said.
According to him, DTEK will continue to in clean and affordable energy and develop the renewable energy industry in Ukraine and hopes that the crisis related to non-payments for the renewable energy sector will be resolved soon, and the state policy regarding renewable energy will become understandable and predictable.
President of Vestas Northern & Central Europe Nils de Baar said that the Tiligulska WPP was the first order for the company’s EnVentus platform in Eastern Europe.
“We applaud the ambition of the Tiligulska project, and the confidence shown by DTEK in our technology as we continue to lower the cost of clean, renewable wind energy with the EnVentus platform,” he said.
According to the document, DTEK Tiligulskaya WPP will be equipped with innovative onshore wind turbines Vestas, suitable for low to medium wind speeds, the industrial production of which was launched early 2021. A total of 21 wind turbines with a capacity of 6 MW each will be installed at the wind farm. This model is the largest onshore wind turbine in the Vestas portfolio in terms of rotor size, spanning 162 meters from tip to tip, and its performance is a quarter higher than previous models.
According to DTEK’s calculations, the operation of phase one of the 126 MW wind farm will help reduce CO2 emissions by 504,000 tonnes per year.
The scalability of the Tiligulska wind power plant will also allow it to increase installed capacity to 564 MW, if required.
DTEK Energy has agreed on the terms of restructuring eurobonds and the major bank debt with the committees of creditors-holders of eurobonds and banks, the group’s press service has said.
The company notes that the completion of restructuring will ensure the stable operation of the company in the long term, flexible debt service mechanics, taking into account financial forecasts and an unstable external conjuncture.
DTEK’s Strategy and Finance Director Oleh Tymkiv, whose comment is given in the report, indicated that DTEK was building the negotiation process “as a reliable partner fulfilling its obligations.”
“This allowed to maintain constructive relations and balance the company’s loan servicing capabilities and continue its development,” he stressed.
According to him, during the negotiation process, DTEK was able to make sure that the creditors fully understand the consequences of the crisis caused by the COVID-19 pandemic, both on the country’s economy and on the energy industry.
“This was reflected in their balanced constructive position, aimed primarily at finding a compromise solution. As a result, we managed to reach the best conditions for both sides of the new agreement,” Tymkiv summed up.
