Page 14 - FSUOGM Week 08 2021

FSUOGM PROJECTS & COMPANIES FSUOGM

Naftogaz to enter the retail power market,

raise $7.3bn to invest for upstream

UKRAINE UKRAINE’S natural gas giant Naftogaz says it has 9% of the supply market. There are only
intends to enter the retail electricity and ener- 12.5mn customers on the market. Our ambition
Ukraine has launched a gy-efficiency markets in 2022, the head of the is to have at least 30% [35% by 2025 in the pres-
power sector reform but Retail Supply Division of Naftogaz Group, Mak- entation plan]," Rabinovych said at the presenta-
it has been a botched sym Rabinovych, said on February 18, reports tion of the business strategy that will run until
effort so far. Interfax Ukraine. 2025, as cited by Interfax Ukraine.
"We want to represent not only the gas busi- As part of the reforms to Ukraine’s energy
ness as a resource, but all the resources that our market the provision of gas is now available for
clients need. In 2020, we became a gas supplier; private companies. Naftogaz has already seen its
at the second stage [we want] to become an elec- individual customers rise by 600,000 new cus-
tricity service provider," he said at the presenta- tomers to a total of 850,000, as well as another
tion of the company’s new business strategy in 500,000 customers, which were added as those
Kyiv, reports Interfax Ukraine. who work with a supplier of last resort (when no
At the same time, the company says it needs other supplier is available).
to raise $7.3bn from investors to invest into At the end of 2021, the group plans to have
expanding its hydrocarbon production. Ukraine 1.411mn customers, 2.057mn in 2022, 2.479mn
already produces some 20bn cubic metres of gas in 2023, and 2.867mn in 2024, according to the
a year which covers about half of its domestic new business strategy.
demand, and while its hydrocarbon deposits are In addition to expanding its presence on
modest, experts say they are probably sufficient the market, the company aims to increase its
to cover almost all of its energy needs. resources by investing $7.3bn in hydrocarbon
Ukraine has launched a power sector reform production in 2021-2025, boosting reserves by
but it has been a botched effort so far. The coun- 1.8 times, chief operating officer of the Nafto-
try was plunged into scandal last year after the gaz Group Otto A. Waterlander said at the same
government failed to pay for renewable energy press conference.
produced by independent producers that have "In the next five years, our business plan pro-
been investing heavily in the sector in the last vides that we will invest $7.3bn in upstream and
few years. The central body responsible for buy- production, and in the next five years [2026-
ing power from the power companies has run 2030] we will double this amount [to $14.1bn],"
up a $1bn debt to these companies it is unable he said at the presentation of the business strat-
to pay. egy, adding that it will be $0.9bn in 2021, $1.5bn
Rabinovych expressed the hope that many of in 2022, $1.3bn in 2023, $1.6bn in 2024, $1.9bn
these problems will be fixed in the near term and in 2025, $2.3bn in 2026, $3.1bn in 2027, $3.1bn
that the electricity market "will soon become free in 2028, $2.9bn in 2029, and $2.7bn in 2030.
of PSO (public service obligations)." The share of investments in new fields from
Rabinovych also said that Naftogaz is already 2023 will exceed investments in fields under
implementing pilot projects on energy efficiency, exploration.
especially in the heat supply market after it is Naftogaz says it currently has 254 bcm of gas
opened up to private companies. in proven gas reserves and 157 bcm of contin-
Naftogaz believes it can capture some 35% of gent and prospective gas reserves. By 2025 Naf-
the retail power market in the coming years. togaz intends to increase these reserves to 250
"Now we say that the Naftogaz group already bcm and 500 bcm respectively. ™

P14 www. NEWSBASE .com Week 08 24•February•2021