30 Dec 2022 15:18

Ukrnafta plans to take out bank loans - director

MOSCOW. Dec 30 (Interfax) - With 100% of its shares now in the state's hands, Ukrnafta plans to shift its financial operations to state-owned banks and to take out bank loans to finance development and investment projects, the company's new director Sergei Koretsky said.

"Of course, there is a certain historical legacy that banks are not particularly thrilled with, but a process is underway, we are undergoing compliance procedures," Koretsky said in an interview with Ukrainian journalists.

According to Koretsky, when he took over as Ukrnafta director, the only liquidity the company had was equivalent to one monthly salary or even less, whereas the company needs to buy electricity, material and technical resources and cover other expenses.

At the same time, the company fulfills all of its obligations to ship products it sells at auctions on exchanges and as part of direct contracts, he said.

"We offer comprehensive solutions to all clients wishing to buy hydrocarbons (we sell the entire range of them - from natural gas to petroleum products) - they are welcome to take part in auctions and receive the high-quality resource on market terms. Ukrnafta will be open and guarantees the timely shipments of all amounts that have been paid for," he said.

Koretsky also said that Ukrnafta plans to actively enter the market of natural gas supplies to end consumers.

"Just for understanding: previously, the company had only five clients with direct contracts. Now we plan to become a reliable long-term partner both for large industrial enterprises and businesses that need small volumes. We invite everyone to cooperate," Koretsky said.

Ukrnafta has a little more than 500 million cubic meters of gas in the country's underground storage facilities which the company expects to sell on the exchange or under direct contracts, he said. At the same time, the natural gas market has significantly decreased since the start of the crisis - the amount the industry is buying now is at best half of what it was previously.

As reported, Ukrnafta reduced oil and condensate production by 0.1% to 1.499 million tonnes in 2021 year-on-year. Its gas production dropped by 0.9%, to 1.117 billion cubic meters, whereas the production of liquefied gas increased by 1% (or by 1,200 tonnes), to 117,700 tonnes.

When asked about possible litigation with former shareholders, Koretsky said that the company could act as a co-respondent in such proceedings.

"If there is litigation between the state and former stockholders, Ukrnafta will be acting in compliance with current legislation: it will provide all necessary data, clarification, etc. As regards an evaluation of the assets, it falls within the remit of the Defense Ministry of Ukraine," he said.

As reported, on November 5, the headquarters of the supreme commander-in-chief decided to forfeit to the state as military property the shares of Ukrnafta, Ukrtatnafta (excluding the stake of Naftogaz), Motor Sich, AvtoKrAZ, and Zaporizhtransformator. This was done on November 6 after the National Securities and Stock Market Commission had resolved the procedure.

According to data from Ukraine's unified state register of legal entities and individual entrepreneurs, Koretsky replaced Pavel Ovcharenko as head Ukrtatnafta on November 9, and Oleg Gez as Ukrnafta director on November 10.

Ukrnafta owns 85 special permits for production of hydrocarbons. It has 1,809 oil and 153 gas wells on its books. The company owns 537 gas stations.

The controlling stake in Ukrnafta belongs to Naftogaz, while the minority stake (about 42%) was held by organizations affiliated with Igor Kolomoisky and Gennady Bogolyubov, the former owners of nationalized PrivatBank.