Page 74 - UKRRptOct23

9.0 Industry & Sectors 9.1 Sector news
9.1.1 Oil & gas sector news
Ukraine can continue gas transit from Russia if European countries need it. According to the chairman, Oleksiy Chernyshov, Naftogaz is losing money with the current agreements, as Russia transports much less gas than it should do according to its contractual obligations. "We do not plan to extend this contract, which is a clear position," he emphasized. Currently, Naftogaz carries out transit only for the sake of Ukraine's European partners. Chernyshov added that if European companies ask, Naftogaz can consider options for extending transit. According to the contract, Gazprom is obligated to send at least 65 billion cubic meters of gas in 2020 and 40 billion cubic meters of gas per year between 2021 and 2024 through the Ukrainian gas pipeline, which would provide $7B in transit revenue. However, Russia currently supplies 12 billion cubic meters per year. Kyiv claims that Moscow is underpaying despite a contractual obligation to pay the full transit fee regardless of the gas volume delivered.
Gas production in Ukraine is on the rise, approaching levels seen before the outbreak of full-scale hostilities. State-owned company Ukrgazvydobuvannya achieved a significant milestone by increasing gas production to 36.6 million cubic meters per day in August, according to a statement from Naftogaz, Ukraine's national energy company. However, it's important to note that this figure still falls short of the levels recorded prior to the conflict.
In January and February 2022, Ukrgazvydobuvannya reported daily gas production figures ranging from 39 to 40 million cubic meters, highlighting the extent to which the war disrupted Ukraine's energy sector. Despite these challenges, the company managed to produce 12.5 billion cubic meters of marketable natural gas in 2022, a modest 3% decrease compared to the previous year.
The recent uptick in gas production can be attributed to the successful operation of new gas wells, demonstrating Ukraine's commitment to revitalizing its energy sector. Ukrgazvydobuvannya has set an ambitious goal for 2023: to increase natural gas production by one billion cubic meters, reaching a total of 13.5 billion cubic meters.
Market experts are optimistic about the industry's future, predicting that private companies will also contribute to increased gas production in 2024. This promising outlook suggests that Ukraine is making significant strides toward energy self-sufficiency and economic stability, despite the ongoing challenges it faces.
Ukraine has launched five more wells and increased the number of foreign gas contracts to 130. State extraction company Ukrgazvydobuvannya launched new wells with 500,000 cubic meters of additional daily gas production. According to the company, one well is new,
74 UKRAINE Country Report October 2023 www.intellinews.com