Gas production: how deposits in Ukraine are found

Gas production is a risky business both in Ukraine and abroad. Well drilling costs tens of millions of dollars, while world experience says that two out of three wells are empty, and the money invested in them is lost.

The less explored a potentially gas-bearing area is, the longer exploration will take. For the first year or two, only seismic studies are usually carried out, with the help of special vibration installations, an "ultrasound" of the earth's crust is made to determine whether there are gas reserves.

But even after careful study of the site, no one can guarantee success. Of course, well drilling can be carried out without preparation, but this is a direct road to burying money in the ground.

Kosatka.Media tells what gas producing companies are doing “in the fields” before they can get the first cubic meters of blue fuel.

Geological risk and 8%chance of success

Companies that want to produce gas get exploration licenses from the state to operate in potentially gas-bearing areas (the so-called greenfield areas). Huge funds are invested, and entrepreneurs take on all risks.

In such areas, seismic exploration has not been carried out before, or it was carried out in Soviet times. This is not the level of information quality that is needed now - not digital, but "rolls of wallpaper" on which something is painted.

If there was no geological risk, the state would have been producing gas on its own, and would not have put up the territories for tenders or auctions. Because any well would be successful and the investment would quickly pay off.

For example, statistics collected from 1943 to 2021 for each well in the Donetsk-Dnieper depression (one of the oil and gas regions of Ukraine) shows that the average well success rate is 39%. The gas industry considers this region to be quite geologically successful.

For offshore fields, the global average success rate is 8-10%. And this is considered normal.

International practice shows several examples when huge deposits that were discovered after drilling 10-20-30 empty wells.

What needs to be done in order not to lose millions?

None of the investors wants to spend money on those two "dry" wells, to possibly get gas from the third. Therefore, drilling is preceded by a whole cycle of work, the purpose of which is to reduce the risk of failure.

  • All geological information is collected and interpreted. Information is collected on land users, on sites. Sometimes it happens that the best place for drilling is a settlement, a river, a quarry, or a nature reserve. In this case, the well can be displaced. But if it moves to the side more than 1 km, it becomes very difficult to drill it technically, it becomes very expensive.
  • 3D seismic. After all the information about the terrain has been collected, it is analyzed and points are selected where I will “shoot” 3D seismic. This stage has seasonal restrictions. The seismic survey is influenced by fieldwork, the presence of swamps, the period of rains, floods, harvesting, and so on. During the year, gas workers have 2-3 "windows" in several months when this can be done.
  • When the 3D seismic results are received, they are processed (converted into a normal digital form), and then interpreted. It takes about 9 months to do all the necessary analyzes of this information.
  • Comparative analysis is additionally performed: 3D seismic studies, lithological studies, chemical studies, images from space are superimposed on the same area.
  • Having collected all the information, geologists, on its basis, build a geological model of the field, determine the optimal drilling points.
  • When the drilling point is determined, the environmental impact assessment (EIA) process begins. This is the process by which the impact of drilling a well on an area is predicted and what needs to be done to minimize it. According to the legislation, the EIA is carried out for 6 months. You can't go faster.
  • And only after passing all these stages, the investor starts drilling. In general, according to representatives of the gas industry, quick results are not often enough.

The main factor that affects gas production is a stable regulatory and investment environment. The second most important factor is the prices of the extracted raw materials. If they are stable or growing, the business invests in the industry. If a shock occurs, as was the case in 2020, all global companies lose money and stop investing in the industry. Then production drops sharply.


Tags: gas, DTEK, Naftogaz, Ukrgazvydobuvannya, gas production

Read also

Excise tax for renewable energy sources, introduction of REMIT and regulation of storages: what decisions the power industry expects from the Verkhovna Rada
No coal and light: winter in Ukraine
Conclusion on environmental impact assessment: the lawyer named the main mistakes when receiving