Naftogaz attracted an international investor to increase gas production at depleted fields

The Naftogaz group, as a result of an open tender, attracted the international company Expert Petroleum to increase hydrocarbon production at the fields of Ukrgazvydobuvanny in Western Ukraine. This was reported by the press service.

It is noted that Expert Petroleum pledged to invest about 1 billion UAH ($ 30 million for the forecast rate) in stimulation, well drilling and infrastructure development during the first 5 years of cooperation, and, potentially, to carry out additional investments in the future.

“The partnership between Naftogaz and Expert Petroleum will provide at least 300 of additional million cubic meters of gas in 13 small fields in Western Ukraine for 5 years,” the report said.

According to the company’s calculations, the intensification of work, the increase in taxes and other budgetary contributions from the partnership will allow us to accumulate more than UAH 4 billion to the GDP of Ukraine and Lviv region.

“The development of international partnerships is one of the key vectors of the Naftogaz transformation program. The concluded agreement provides for the largest foreign investment in Ukraine’s gas production over the past 5 years. They will be allocated for the development of those small and depleted fields for which Naftogaz does not have enough of its own resources in the face of a significant drop in energy prices. Instead of the expected decline in production in these areas, we will get growth... ” said Otto Waterlander, Chief Transformation Officer at Naftogaz Group.

The contract between Expert Petroleum and Ukrgazvydobuvannya was concluded for 15 years with the possibility of extension for another 10 years. To fulfill this contract and related services, Expert Petroleum has registered a specialized Ukrainian company that will be a party to the contract.

Naftogaz Group will approve development plans, an annual work program and budget proposed by the operator at these fields. The operator will receive a fixed fee for supporting basic production (at the current operating expenses of Ukrgazvydobuvannya taking into account the inflation component) and for achieving increased production. Full ownership of the extracted products, geological licenses and available assets will remain with Ukrgazvydobuvannya. 

Reference.

Expert Petroleum is a company with French owners, which is part of the holding group GMS, a large investment group with assets around the world. Expert Petroleum maximizes the potential of mature oil and gas fields by investing in these assets, assuming responsibility and additional production risks under the terms of a long-term production enhancement contract (PEC). Now the company effectively manages production at 25 depleted fields, operates 1,200 wells, and daily produces 8.5 thousand barrels of oil equivalent per day.

Tags: The Cabinet of Ministers, gas, Naftogaz, contracts, hydrocarbon production, EU, Top management, energy market, Ukrgazvydobuvannya, gas production, oil production, GTS, drilling, foreign affairs, unbundling, Gas market, stocks, volumes, petroleum products, oil deliveries, well, field, infrastructure, energy sector, innovations, technologies, natural gas, oil pipeline

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