10 Apr 2023 17:05

Ukrnafta drafts exploration and production agreements for potential investors

MOSCOW. April 10 (Interfax) - Ukrnafta is drafting agreements on the exploration and development of fields for potential investors, company chief Sergei Koretsky said.

"These are contracts in keeping with best world practices and taking Ukrainian legislation into account; there is a Production Sharing Agreement (PSA) and Risk Service Agreement (RSA)," Ukrainian media quoted him as saying on social media.

Koretsky said one of the company's priorities was to increase production of Ukrainian oil and gas, which has been declining in recent years due to underfunding. Outdated equipment has only partially managed to arrest natural production decline, and there has been no growth, he said.

"So production growth is an ambitious goal, which will require serious, continuous effort as well as time, significant investment and partners who will help to implement modern technologies," Koretsky said.

To this end, Ukrnafta has set up a Virtual Data Room, where every company wanting to invest in the exploration and development of its fields will be able to obtain comprehensive geological and commercial information about the fields offered.

"After completing the package of preparatory documents, Ukrnafta will announce a public tender for investors who have passed the compliance procedure for joint exploration and development projects," Koretsky said.

The Headquarters of the Supreme Commander-in-Chief ruled on November 5 to expropriate the shares of Ukrnafta, except for the stake held by Naftogaz, as military assets while martial law remains in effect. A stake of about 42% was owned by the firms belonging to Igor Kolomoisky and Gennady Bogolyubov prior to the expropriation.

Ukrnafta held 89 hydrocarbon development licenses with 3,700 oil and gas wells as of the end of March 2023. It operated 451 filling stations.

Ukrnafta reduced output of gas with condensate 8.6% in 2022 to 1.37 million tonnes.

It plans to increase oil production 5.8% to 1.45 million tonnes and gas 0.3% to 1.04 billion cubic meters in 2023.