Friday, June 21, 2024
HomeOil & GasNaftogaz signs first-ever PEC in Ukraine's oil and gas history
Powered by

Naftogaz signs first-ever PEC in Ukraine’s oil and gas history

Ukraine’s national oil and gas company Naftogaz started a partnership with French-owned company Expert Petroleum, to increase hydrocarbon production on the fields of Ukrgasvydobuvannya, in Western Ukraine.

Within the first-ever full-scale Production Enhancement Contract (PEC) in the history of Ukraine’s oil and gas industry, Expert Petroleum has committed to about 1 billion Ukrainian Hryvnia (around 34 million euros) into intensification, drilling and development of infrastructure in the first five years of cooperation and, potentially, make additional investments after that.

Such partnership will generate at least an additional 300 million cubic metres of gas within five years from 13 small fields in Western Ukraine.

“International partnerships developing is one of the key vectors of Naftogaz’ transformation program,” said Naftogaz Group’s Chief Transformation Officer Otto Waterlander (pictured above). “The agreement assumes the largest foreign investment in Ukraine’s gas production over the last five years. This money will be directed into the development of those small-size depleted fields for which Naftogaz does not have enough own resources under the circumstance of the significant drop in prices for energy resources. Instead of the expected production decline in these fields, we will achieve an increase in production.”

“We will bring to Ukraine new technologies and European standards for the management of old and small deposits, which can be extrapolated to other fields,” he continued. “After all, most of Ukraine’s oil and gas assets are depleted and small in size. This is an important event for stabilizing the situation not only in the industry but also in the Ukrainian economy. And this is an example of innovative anti-crisis solutions that the country needs today.”

According to the company’s calculations, intensification of works, an increase of tax and other budgetary contributions of the partnership will allow accumulating more than 4 billion Ukrainian Hryvnia (136 million euros) in GDP of Ukraine and the Lviv region in particular.

“We have a solid and successful track record of implementing such Production Enhancement projects with major national and international oil and gas companies in Romania and Hungary in particular, where Expert Petroleum invested more than 100 million US dollars in some projects and increased the production up to 150 per cent above the baseline,” added David Martinon, Expert Petroleum Co-founder and CEO. “Today, we are pleased to begin a similar partnership with Naftogaz in order to make their depleted gas field more sustainable by increasing production and reserves and implementing safe and green operations. We hope this agreement will lead the way to many more partnerships like this one.”

Michel Louboutin, Co-founder and COO, highlighted the responsibility that comes with this commitment to the effective and safe development of the Ukrgasvydobuvannya’s fields and the objective to increase their production and reserves.

“For this purpose, we plan after completing of new reservoir models to drill new wells, carry out operations on the intensification of existing wells using the latest technologies in directional drilling, logging, water shut off management and perforations and modernise the surface facilities to increase operational efficiencies, reduce energy intensity and environmental footprint,” he said. “Expert Petroleum’s commitment to the local community is its absolute priority, in particular the training of employees’ competences on new technologies. The company takes all measures to ensure that employees work in a supportive environment, focusing on safe working conditions and strive to comply with the highest standards of environmental protection, occupational and process safety.”

Sign up for our newsletters

    Monthly newsletter – Delivering the most important energy stories of the month selected by our Editor-in-chief
    Weekly Oil&Gas roundup - All major news about the oil and gas industry, LNG developments, the upscaling of new gases and related EU regulations arriving in your mailbox every Monday.
    Weekly Renewables&Climate roundup - All major news about investments in renewable energy sources, environment protection, green hydrogen and new innovative ways to tackle the climate crisis arriving in your mailbox every Tuesday.

    Most Popular