Business news from Ukraine

IBM WINS TENDER TO DEVELOP INFORMATION TECHNOLOGY STRATEGY FOR THE LARGEST OIL AND GAS PRODUCING COMPANY IN UKRAINE

IBM Ukraine LLC, which is wholly owned by IBM Central and Eastern Europe, has won a tender called by NJSC Naftogaz Ukrainy to have its strategy for information technology developed. IBM Ukraine, with a bid of UAH 3.748 million (VAT included), defeated other bidders, namely Ernst & Young (E&Y) and PwC Polska, Naftogaz announced in the ProZorro e-procurement system. The services must be provided by December 31, 2018.
The goal is to determine the level of IT maturity and ensure maximum efficiency from investments in IT. As a result, the target operating model of the company’s IT and the development roadmap should be developed, including a portfolio of projects, the necessary resources and portfolio management processes.
The IT analysis should be carried out for Naftogaz and its subsidiaries, namely Ukrtransgaz, Ukrgazvydobuvannya, Ukrtransnafta, Ukrspetstransgaz, Chornomornaftogaz, and Ukravtogaz.
Naftogaz Ukrainy unites the largest oil and gas producing enterprises of the country. It is a monopolist in transit and storage of natural gas in underground storage facilities, as well as transportation of crude oil by pipelines throughout the country.

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IN JAN-MAY UKRAINE IMPORTS GAS WORTH $906 MLN

Ukraine in January-May 2018 imported 3.269 billion cubic meters of natural gas for a total of $906.701 million, in particular in May 1.114 billion cubic meters worth $293.571 million, according to the State Statistics Service. Thus, the average price of gas imported by the country in May 2018 was $263.5 per 1,000 cubic meters against $310.8 in April, $278.7 in March, $261.1 in February and $279.4 in January.
The main counterparties for the five months were companies from Switzerland with 1.377 billion cubic meters of gas for $380.827 million, Germany with 937.534 million cubic meters for $261.087 million, Poland with 285.745 million cubic meters for $84.545 million and the UK with 245.215 million cubic meters for $65.281 million.
Gas was not imported from the Russian Federation in January-May-2018.

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UKRAINIAN GAS MONOPOLY THINKS RUSSIA MAY DELAY GAS TRANSIT TALKS

Chief Executive Officer of NJSC Naftogaz of Ukraine Andriy Kobolev has expressed fears that the Russian side will do everything to delay negotiations on the extension of the contract for gas transit through Ukraine, expecting possible changes in the country’s top officials and policy. “Most likely, they are waiting for elections in Ukraine and they want to see if there is any change in power and the country’s political course. They will do everything possible to launch the Nord Stream 2 pipeline construction,” Kobolev told the Kyiv-based Interfax-Ukraine news agency.
Kobolev said Russians now express readiness to study the issue of moving to work within the framework of European legislation, but they are stalling and trying to introduce the issue of negotiating settlement agreements in a trilateral format.
“Until recently, Russians’ position was not constructive. Before the agreement on something under the transit contract, they want to talk about amicable deals within the Stockholm litigation, that is, raise questions that are unacceptable not only for us, but for any party , which won in court,” he said.
Kobolev expressed hope the third party of the negotiations represented by the European Commission would have an impact on Russia, since stalling the process is not advantageous to Ukraine and European consumers of Russian gas.
“As our experience shows, a force majeure signing at the end of 2019 would be a very bad story. I hope that the position of Europeans may lead to a change in the tactics of Russians and they will be forced to negotiate before the end of 2019 about a new format of relations from January 2020. We are working actively on this now. The European Commission is in agreement with us in the application of European law. If we agree on this as a basis, then all further actions become much easier and more effective,” Kobolev said.

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UKRTRANSGAZ ANNOUNCES TENDERS TO BUY GAS

Public joint-stock company Ukrtransgaz on June 22 and June 23 announced 12 tenders to buy gas for technological needs and balancing in the amount of 2.437 billion cubic meters with the expected cost of UAH 21.202 billion (VAT not included).
The bids can be submitted before July 23 and July 24 (depending on the lot). The auctions will take place on August 28 and August 29.
The final price of gas to be paid by Ukrtransgaz to the winners of the tenders will be determined, taking into account quotations at NetConnect Germany (NCG) in the period when gas is delivered.

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LARGE GAS PROCESSING COMPANY UKRGAZVYDOBUVANNIA HAS A SLIGHT RISE IN PRODUCTION

JSC Ukrgazvydobuvannia in January-May 2018 increased gas production by 1% or 0.063 billion cubic meters (bcm) year-over-year, to 6.288 bcm, the company’s press service reported last week. The press service said that this production volume in the first five months of the year was reached for the first time since 2014. “For the fourth consecutive month, the company has been increasing daily gas production within the limits of 1 million cubic meters due to all types of operational activity, but since the existing resource base of the company is almost 70% depleted, the natural decline exceeds the growth. The non-issue of new licenses hinders the development of the new resource base of Ukrgazvydobuvannia,” the head of the company, Oleh Prokhorenko, said.
At the same time, he said that the company from the end of this month overcame the May negative factor and moved to the actual increase in daily production compared to last year.
The press service said that in the third and fourth quarters of 2018, Ukrgazvydobuvannia plans to launch new technological capacities: eight booster compressor stations, an increase of up to 50 tools for work-out of wells of external contractors, ten coiled tubing and nitrogen units, and the launch of new wells of external drilling contractors.
Ukrgazvydobuvannia, which is wholly owned by NSJC Naftogaz Ukrainy, is a large gas processing company, which accounts for about 75% of total gas output in the country.

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DTEK MINES RAISE GAS COAL OUTPUT BY 5% IN APRIL

DTEK’s mines in April 2018 increased gas coal production by 5% compared to April 2017, to 2 million tonnes, the company’s press service has reported.
“The growth in production at DTEK Pavlohradvuhillia in April this year was 3% compared to April 2017, to 1.7 million tonnes, at DTEK Dobropilliavuhillia it stood at 19%, to 334,000 tonnes,” the report said.
According to the press service, in April the company invested UAH 387 million in the development of production at the mines of DTEK Pavlohradvuhillia and DTEK Dobropilliavuhillia. Of these, UAH 167 million was invested in the purchase and overhaul of purification equipment, UAH 94 million in capital mining and UAH 29 million in tunnel equipment.
Since the beginning of the year, 12 longworks have been commissioned at DTEK’s coal enterprises.

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