27.07-02.08.2020

The Energy Community approved the creation of the natural gas exchange in Ukraine. At that, the Secretariat of the Energy Community supports the creation of the natural gas exchange based on the Ukrainian Energy Exchange (UEE).
On July 20, a Memorandum of Understanding was signed between the Secretariat of the Energy Community, the Ministry of Energy of Ukraine, the European Bank for Reconstruction and Development and the Ukrainian Energy Exchange.
"The Memorandum is meant to support the restructuring of the Ukrainian gas sector in compliance with the EU legislation to ensure competition and provide benefits to Ukrainian energy consumers and the economy as a whole," the statement said.
In turn, the UEB notes that the Ukrainian Energy Exchange and GTS Operator of Ukraine LLC will join forces to build a competitive, transparent and efficiently functioning natural gas market in Ukraine. Gas market operator and trading platform operator start implementing the European approaches to the daily balancing market. The UEE expresses hope for support of regulatory initiatives aimed at ensuring conditions for the stable functioning of the market in terms of amendments to the Law on Public Procurement and recent initiatives of the regulator on amendments to the GTS Code.
As for gas imports from the EU, according to Sergey Makogon, CEO of GTS Operator of Ukraine LLC, it is expected to reach 108 MMCM as of August 1 of this year. This is 38 MMCM more compared to the previous day. This became possible as a result of the introduction of the border virtual reverse, which removed the existing technical restrictions (66.5 MMCM per day).
These additional 38 MMCM are imported through virtual reverse from Slovakia via Uzhgorod/Velki Kapushany point. At the same time, as Sergey Makogon noted, the Slovak side is not yet ready to create a joint border virtual point, but they will no longer be able to restrain the virtual reverse.
“The introduction of the European practices at the border with the EU is a win-win solution for everyone. European traders can bring additional gas volumes to Ukraine. Ukrainian GTS Operator and UGS Operator will receive additional funds and pay additional taxes to the budget. Moreover, large volume of gas in our UGS facilities is a guarantee of energy security, ” Sergey Makogon said.
It got about on Friday that the Supervisory Board of Ukrnafta appointed a new head of the company. The contract was signed with Oleg Gez, who has been acting head since May 2019.

20-26.07.2020

Naftogaz Group started drilling a new well at the Strelkovoe field. The design flow rate of the well is 40 MCM per day. The head of Naftogaz Group Andrey Kobolev noted that gas produced would mean for uninterrupted gas supply to Genichesk and Genichesk district, which are not connected to the main GTS. According to him, increasing production from the Strelkovoe field is the most promising gas supply option for Genichesk and a logical step for Naftogaz, especially as compared to the option of constructing a separate main gas pipeline at the expense of Naftogaz. Drilling of the well was started by the team of the Technical Division backed by Weatherford (USA), which provides geophysical work. Over the next two months, the company expects to raise gas reserves and fully meet needs by the start of 2020-2021 heating season.
At the end of the first half of 2020, Naftogaz Group transferred 6.7 BCM of gas for the needs of the population. The company notes that despite unfavorable market conditions, namely a 47% decrease in the company's gas sales price, which undermined investment opportunities, the Group managed, with a slight deviation, to maintain production at the previous year's level. One of the current priority goals is to develop a medium-term gas exploration and production strategy to increase the hydrocarbon resource base.
The Association of Gas Producers of Ukraine expressed deep concern about the lack of a number of proposals from the gas industry in the final version of the State Program for Stimulating the Economy. In particular, it comes to the extension of the state-guaranteed period of invariability of hydrocarbon production taxation from new wells from 5 to 10 years; introduction of incentive royalty rates for oil and condensate production from new wells similarly with the incentive regime for natural gas production; introduction of incentive royalty rent to restore wells and produce unconventional hydrocarbons deposits with the development of a transparent method for identifying such deposits.
In its appeal, the Association notes that at a time when the world's leading producing countries get a head start, introducing incentive measures for investors and providing tax incentives to the oil and gas sector, the domestic industry was left face to face with the crisis.
“Being left without government support, we risk losing domestic production of hydrocarbons, resulting in even greater dependence on imported gas and the loss of the lion's share of taxes,” Artem Petrenko, executive director of the Association of Gas Producers of Ukraine, said.

13-19.07.2020

A new manager joined the NAK Naftogaz Group. Maksim Vityk is now responsible for Naftogaz’s strategic exploration and production projects. His tasks will include, among others, building up hydrocarbon resource base, including through the development of unconventional gas deposits and the sea shelf, as well as attracting international partners and investors to cooperation with Naftogaz.

Maksim Vityk’s background covers over 20 years of work in international companies, including in ExxonMobil and Shell.
The British company Enwell Energy, which is part of the Smart Energy Group of Companies, started drilling of the well No. 25 at the Sviridovskoe field in the Poltava region.
Well design depth is 5,320 m. This is the exploratory well to be completed in Q1 2021. According to the press release, the company notes that the well is designed to explore and set the commercial value of hydrocarbon deposits of the B-20, B-22 and B-23 horizons of the Visean stage. Provided successful tests, the well is expected to be commissioned within Q2 of next year.
Roman Opimakh, Head of the State Service of Geology and Subsoil of Ukraine, run with an initiative to force the process of completing the Subsoil Code bill. The State Service of Geology and Subsoil of Ukraine expects to cope with this ambitious task in two months.
In June 2020, Ukrnafta PJSC paid taxes to the budgets of all levels in the amount of UAH 715 million. This amount includes royalty rent for subsoil use, VAT, income tax, excise duty and other taxes. The amount of taxes paid for 6 months of 2020 totalled UAH 6.84 billion.

06-12.07.2020

In 2020, the oil and gas market is ready to absorb up to USD 1 billion in the following areas: the latest technologies, IT and data, scientific developments, service projects, the development of new oil and gas fields, the intensification of existing and abandoned wells, infrastructure projects, the stimulation of an increase in domestic oil and gas production. This was stated by Deputy CEO of Ukraine’s Oil and Gas Association Andriy Gadzhaman.

“We boost the idea by the President of Ukraine to introduce the Invest Nurse project to facilitate the implementation of investments. Key provisions of the bill were considered on June 30, 2020 at the National Reform Council, which provide for by an investor:
- raising up to USD 30 million;
- creation of 150 and more jobs with a salary of 15% higher than in the investment region.
Such an investor will enter into a 10-year direct contract with the Government with a guarantee of stability. The Invest Nurse operational project will be based on investment managers of the government organization UkraineInvest. The main oil and gas market players are interested in resuscitation of the oil and gas market of Ukraine after the Covid-19 emergency consequences. UkraineInvest, in collaboration with existing players, will be able to restart the oil and gas market and enhance Ukraine’s energy stability and security,” Andriy Gadzhaman said.
DTEK Neftegaz announced the introduction of cable-free “green seismic” technology.
The peculiarity of the technology is that it is not a cable that is used to connect the geophones, but cable-free systems, and special heavy equipment is not required to install the sensors.
Using cable-free technology allows for effective work in complex terrain and remote places. It also makes it possible to reduce the time of work and minimize any possible environmental impact.
Cable-free seismic exploration will be the first project implemented as part of the Oil and Gas Technohub.
Enwell Energy, which is part of the Smart Energy Group of Companies, released Q2 2020 production results.
The company notes that Q2 2020 total production saw 12.5% increase compared to Q2 2019. Commissioning of the well No. 54 at the Sviridovskoe field in May this year was a cause to increase production.