On June 22, the head of the integrated gas business of Naftogaz of Ukraine Andriy Favorov presented to the sector experts and mass media the updated strategy for exploration and production of hydrocarbons and delivered the results of work on the depleted fields.

Considering the global changes in the international gas market, more specifically the fall in gas prices by more than 50% and increase in the supply of liquefied gas (LNG) to Europe from other parts of the world, the world's major gas companies adjust their business strategies, and Naftogaz Group is not an exception.

Ukrgazvydobuvannya repeatedly emphasized that 75% of deposits are depleted by more than 87% and one can observe a rapid decline in basic production. That is why Ukrgazvydobuvannya makes considerable efforts to compensate for the natural fall, but a significant increase in production requires obtaining a sufficient number of new special permits.

Given the new market realities, the updated production plan foresees:
• Focusing on keeping basic production, developing existing infrastructure and dealing with the most efficient wells;
• - Selecting only the best candidate wells where we are confident of investment payback;
• Implementing field digitization and upgrading IT infrastructure of the production system to optimize costs;
• Increasing production of liquid hydrocarbons due to favorable market situation;
• Involving the world's leading industry companies to collaborate on our depleted, unconventional or large fields, as well as to gain new knowledge: Production Enhancement Contracts (PECs), Product Sharing Agreements (PSAs).

As Andriy Favorov noted, UGV focuses on economically viable production projects that will increase the volume of commercial gas and increase cash capital to finance investment projects. The company has already achieved significant results by upgrading its equipment, implementing production intensification works, upgrading ground infrastructure and purchasing new drilling rigs. Engaging international best practices and enhancing staff competencies is the next step in improving the company's operational efficiency.

It is worth noting that all the company’s transformation processes are primarily aimed at building a culture of production according to international standards and setting a high bar for compliance with labor protection and industrial standards.

Within the event, Andriy Favorov also provided explanations for the implementation of the UAH 40 billion capital expenditure plan during 2016-2018, of which about 60% was spent on drilling and 30% - on modernization of outdated capacities and development of competencies. Such investments resulted in a 1 bcm increase in the volume of commercial gas compared to the year of 2015.

http://www.ugv.com.ua/uk/page/andrij-favorov-prezentuvav-onovlenu-strategiu-z-rozvidki-ta-vidobutku-prirodnogo-gazu