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Ukraine’s oil and gas industry requires certain government decisions

Ukraine’s oil and gas company Naftogaz Group is seeking to increase its resource base through the exploration of new fields and by developing the potential of new projects.

“Ukraine has opportunities to move from stagnation towards increases in production,” said Naftogaz CEO Andriy Kobolyev. “However, new areas and projects that can deliver this result pose significant risks and require substantial investments, new technology and expertise.”

There are opportunities for deep drilling, tight gas and offshore operations in the Black Sea. However, in addition, the oil and gas industry requires certain government decisions.
These include signing PSA agreements that were won through competition more than a year ago, introducing an incentive royalty for tight gas and giving producers access to the Black Sea shelf and a number of large promising onshore fields. It is also important to continue incentive royalties for conventional gas and simplify licensing procedures.

“Domestic gas production should become the basis for Ukraine’s energy independence,” noted Prime Minister Denys Shmyhal during a meeting with representatives of Naftogaz, the heads of the various ministries and other central authorities as well as Ukrainian MPs.

“Today we have free entry into the EU gas market, which also contributes to the diversification of energy sources,” he continued. “Nevertheless, during our meetings with the Ukrainian President, we repeatedly raised the issue of enhancing domestic production. We need to hold the relevant exploration works, complete partially implemented exploration plans, and start production quickly. Meanwhile, the government exerts every possible effort to achieve this; and we also expect relevant legislative initiatives from MPs. I’m sure that together we will manage to do the necessary work and increase Ukraine’s energy independence within a short-term perspective.”

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