Page 55 - Eastern Europe Outlook 2020

Ukraine, said. Looking beyond Ukraine’s big five cities, she said McDonald’s studies any city with a population over 200,000.
In a testament to Ukraine’s fast-growing e-commerce sector, IKEA is jumping over bricks and going straight to clicks​. “The company decided to launch e-commerce first,” the Swedish-founded furniture giant said in a statement. “The expected launch date is spring 2020.” Two years ago, IKEA, now based in the Netherlands, announced plans to open its first Ukraine store, at Kyiv’s Ocean Mall, but construction delays forced postponements. The company now says it “plans to open the first physical store in Kyiv as soon as possible, after the launch of e-commerce.”
● Oil and gas
Ukraine depends on oil and gas imports for its energy. It has deposits of both oil and gas, however, it has been slow to exploit them.
Ukraine’s domestic gas production amounts to about 20bcm a year, or slightly less than half of current domestic consumption. The country has gas and oil fields in the northern part of the country and in the west in two big gas basins, but so far it has failed to attract much interest from investors due to the political instability caused by the change in government and the ongoing war in the east of the country. State-owned Naftogaz has also been accused of sitting on licences for the sake of maintaining its empire.
Potentially Ukraine could be self sufficient in oil and gas but currently the strategy has been to deal with the Russians and work out a new transit deal which earns the country some $3bn a year in fees. Relations have been so bad Ukraine has turned to its EU partners and is importing gas from them instead of Russia – and paying a premium on the price for gas as a result.
However, there are some exciting possibilities for new production should the business and investment environment improve somewhat. For example, new seismic surveys and analysis indicate that the Przemys´l gas field, which straddles the Polish-Ukrainian border, may have 29bcm of recoverable gas, triple the amount previously estimated. This new estimate was released in Warsaw in December at a signing ceremony to create an exploration and production joint venture between Poland’s dominant gas firm, state-run PGNiG, and Energy Resources of Ukraine, a Kyiv-based Ukrainian-American company.
There are more projects like this in the wings, but progress in getting them off the ground has been very slow.
5.0​ Fiscal and financial markets outlook
● Banks
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