NJSC "Naftogaz of Ukraine" continues implementation of investment projects in foreign countries

In spite of the world financial crisis, NJSC "Naftogaz of Ukraine" continues to implement the strategy aimed at diversification of the sources supplying energy carriers to Ukraine. To date, the Company is studying possibility to take part in the tenders for development and operation of hydrogen deposits within the territory of the People's Democratic Republic of Algeria (National Agency for Development of Hydrocarbon Resources of Algeria, ALNAFT) and the Arab Republic of Egypt (Ganope Company).

Today, specialists of the Company analyze presentation materials concerning the above-mentioned tenders; these materials were received in July, 2009.

It is also worth to underline that NJSC "Naftogaz of Ukraine" continues to implement other existing investment projects in foreign countries in an active manner.

Particularly, in accordance with "Ukraine-Egypt" Program, the following work operations were performed during July, 2009:

  • • the Company continues to drill Sedfa-1Х well. As of August 05, 2009, depth of the well is equal to 2770m;
  • • on June 23, 2009, the Company has begun to drill Hend-1Х well. As of August 05, 2009, depth of the well is equal to 1416m;
  • • tender concerning lease of the machine required for the well workover is completed. Contracts with relevant contractors will be concluded in the nearest future;
  • • the Company has completed preparation of sites for drilling Noura-1 and Mоsaad-1 wells.

During July, 2009, in accordance with "Ukraine-UAE" Program, the following work operations were performed:

  • • the Company continues to drill Khamad-1 well (target depth of the well - 5500m) on the shore of the licensed block С in Al Fujairah Emirate. As of August 05, 2009, depth of the well is equal to 3160m (the well was drilled down by 1014m from July 01, 2009, to July 31, 2009);
  • • negotiations with Abraj Energy Services LLC were held concerning decrease of the daily rate of lease of the drilling rig;
  • • the Company has come to the agreement with the Government of Al Fujairah Emirate concerning early release from the bank guarantee concerning on-shore blocks; the guarantee was proposed by the Company in the amount of $4.25 million. Relevant procedures are completed.

NJSC "Naftogaz of Ukraine" believes that further work in the above-mentioned spheres will make it possible to accelerate process of diversification of the sources supplying energy carriers and promote creation of the world image of Ukraine as the powerful state in the sphere of power resources.

For reference: on December 13, 2006, the Arab Republic of Egypt, Egyptian General Petroleum Corporation, and NJSC "Naftogaz of Ukraine" have concluded the Concession agreement on development of Alam El Shawish site (total area — 994 sq. km) within the Western Desert in the Arab Republic of Egypt.

On February 18, 2009, the first exploratory well (Hg-34/3, depth — 3505m) has produced the oil inflow with daily flow rate at the level of 80 tons / 588 barrels.

The Company places its main hopes on the deposits situated in the southern section of the concession territory, and development of these deposits will begin in the nearest future.

In accordance with the Production Program, it is planned to drill 5 exploratory wells in the southern section of Alam El Shawish block within the Western Desert until the end of the current year; total production resources of these wells are equal to 60 million tons.

On January 26, 2005, Production Sharing Agreement was signed by and between the Government of Al Fujairah Emirate (UAE), NJSC "Naftogaz of Ukraine", and "Naftogaz Middle East L.L.C."; this Agreement envisages completion of the work operations connected with prospecting and exploration for deposits of hydrocarbons within the territory of Al Fujairah Emirate, as well as further development and production of hydrocarbons in the case of discovery of deposits (hereinafter referred to as "the Agreement").

In accordance with the Agreement, it was planned to perform work operations connected with prospecting and development of energy resources within 4 blocks – two on-shore blocks and two offshore blocks in the Gulf of Oman. At the first stage, it was envisaged to drill 2 prospecting wells and 4 exploration wells.

On May 06, 2005, NJSC "Naftogaz of Ukraine", Al Jazirah Enterprise for Projects Development &Trading and "Naftogaz Middle East L.L.C." have signed the Contract on Implementation of the Investment Project and on Production Sharing.

It is planned that the Ukrainian investor will conduct its business in accordance with the terms and conditions of the above-mentioned Agreement and Contract.

Basic characteristics of the Project:

Duration of the Contract – 29 years, including the prospecting period – 4 years.

Planned production level of natural gas – 47 billion cu. m.

Planned production level of condensate – 14.9 million tons.


Press center NJSC "Naftogaz of Ukraine"

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