Ukrnafta to cooperate with Weatherford International to increase production

MOSCOW. June 29 (Interfax) - Ukrnafta, Ukraine's oil and gas company, and Weatherford International, a multinational oilfield service company, have signed a framework agreement on cooperation in oil production, Ukrainian media said, citing a press release circulated by Ukrnafta on Wednesday.

"In the presence of a reliable partner, we will be able to work more effectively to achieve our strategic goals. [There will be] more wells, more state-of-the-art technologies to increase production, more reserves and resources - step by step closer to energy independence," Ukrnafta director Sergei Koretsky said.

Among such steps, Ukrnafta is expected to switch to modern international standards (API, SPE) and to stop using Soviet-era (Russian, Belarusian) equipment and components with the help of an advanced technological partner of Weatherford's level, the company said.

Weartherford International is one of the world's largest oilfield service companies with an extensive track-record and cutting-edge technologies. It operates in more than 100 countries.

As reported, JSC Ukrnafta, which has been fully controlled by the state since the end of 2022, has announced its strategic goal as doubling the production of oil and natural gas to 3 million tonnes and 2 billion cubic meters, respectively, by 2027. The company plans to increase oil production by 5.8%, or 0.077 million tonnes, to 1.447 million tonnes and gas production by 0.3%, or 0.003 million cubic meters, to 1.04 bcm in 2023 year-on-year.

The Headquarters of the Supreme Commander-in-Chief ruled on November 5, 2022 to expropriate the shares of Ukrnafta, except for the controlling and blocking stake held by Naftogaz, as military assets while martial law remains in effect. The firms belonging to Igor Kolomoisky and Gennady Bogolyubov owned a stake of about 42% in Ukrnafta and the controlling stake in Ukrtatnafta together with other partners prior to the expropriation.

Ukrnafta had 89 fields with 23 million tonnes of proven reserves and 1,806 active oil wells and 152 gas wells as of the end of March 2023. The company operates 537 filling stations, of which 28 have been modernized; their sale this year are expected to reach 350,000 tonnes, or about 7% of the market. Wholesale and retail in petroleum products amounted to 1.665 million tonnes in 2022.