UGV, a 100%-owned upstream subsidiary of Naftogaz, had to adjust its financial plan for 2018, with production projections cut from 16.5 to 16.0 billion cubic meters (bcm) of gas. This decision was caused by the fact that Poltava Regional Council has been blocking the issue of new licenses for the development of gas fields over the past 2.5 years. The production forecast is also affected by delays in the adoption of the legislation aimed at simplifying of approval procedures for gas upstream. The delays are putting at risk the implementation of UGV’s 20/20 Strategy (producing 20 bcm in 2020) as well as the government’s Energy Strategy for Ukraine until 2035.
The adoption of Bill #3096-д, which may be considered by the parliament in early December, could improve the current situation with permitting process.
“This year, we have more than doubled our investments in the enhancement of gas production. UGV’s performance proves that new technologies combined with stable funding lead to a substantial production growth at old wells. Nevertheless, in order to implement the 20/20 Strategy on time, we need to develop new fields. We appreciate that the Prime Minister and representatives of the parliamentary coalition are supporting the adoption of necessary regulations and we hope that next week Bill #3096-д will pass the parliament. This would be a real step towards Ukraine’s energy independence,” Naftogaz CEO Andriy Kobolyev said.
NJSC Naftogaz of Ukraine