11 Apr 2024 09:33

Ukrnafta invites investors to tender to restore 20 wells

MOSCOW. April 11 (Interfax) - Ukrnafta, Ukraine's largest oil producer is beginning a program to restore abandoned wells and is inviting investors to work at 20 wells under risk service contracts.

"Ukrnafta is beginning a rehabilitation program and is inviting investors to restore wells [...] Any Ukrainian or international company that passes the compliance procedure can join," Ukrainian media reported, citing the company.

"An important part of the company's strategy to increase production is the restoration of already drilled but abandoned wells that have prospects thanks to the application of modern technologies," Ukrnafta director Sergei Koretsky was quoted as saying in a company press release.

Some 4,222 such wells have now been identified, of which 2,100 that are within the boundaries of Ukrnafta's special permit, including 700 within the bounds of reserve contours.

The company has selected 30 of the 700 wells for a pilot project. Ten will be restored by Ukrnafta itself, and a tender is being called for the other 20.

"The company invites partners to help restore production at these sites by drilling horizontal sidetracks," Ukrnafta said.

The company is proposing to work with partners under risk service agreements, with investors undergoing a compliance process and receiving access to a virtual data room with information about the wells. Ukrnafta will work with experts to put together a pool of three to 12 wells to be restored by partners. The cost of restoring production will be determined through tenders in Ukraine's Prozorro electronic public procurements system.

Subsequently, Ukrnafta will get additional resources and pay for the revitalization with the proceeds of production at the restored wells, while partners will receive a portion of the additional output.

Ukrnafta increased production of oil with condensate by 39,900 tonnes or 3% to 1,409,900 tonnes in 2023. Production of natural and associated petroleum gas increased by 60.4 mcm or 5.8% to 1.097 billion cubic meters.

Ukrnafta has the strategic goal of doubling oil and natural gas production by 2027, to 3 million tonnes and 2 billion cubic meters, respectively.