The first quarter of 2024 was quite successful for the oil and gas sector. Production of blue fuel increased by 12%, reaching a volume of 3.5 billion cubic meters. New oil fields are being developed and new safe production technologies are being introduced.
The latest achievements of the industry
The result of positive changes in the sector is that, for example, gas reserves of JSC “Ukrnafta” increased by 0.6 billion cubic meters, and oil reserves – by 3 million tons. For comparison: last year, Ukraine produced a total of 1.1 billion cubic meters of gas (+6%) and 1.41 million tons of oil (+3%). Records are being set in the industry in terms of indicators of preparation for extraction.
Tipping point
After 2019, the volumes of gas production by state-owned companies constantly decreased. As for oil, the production in the sector generally decreased to minimal indicators. This was the result of participation in the board of companies of people connected with oligarchic clans.
Oil refining was under the long-term influence of companies whose traces led to the Russian Federation. In this way, Ukraine has become quite dependent on the oil products market of Belarus and the Russian Federation.
In 2022-2023, the trend changed. Although privatization is usually more efficient for business and state intervention does not promote rapid development, in this situation the opposite was true. Meticulous audits and “reshuffles” in state-owned oil and gas production and processing companies became an impetus for the development of the industry.
Long-term “schemes” stopped working, and oil and gas companies increased their contribution to the state budget. In particular, according to the results of 2023, JSC “Ukrnafta” transferred 25.7 billion hryvnias to the budgets of all levels. And last year’s contribution of enterprises of the Naftogaz of Ukraine group to the budget amounted to 90.2 billion hryvnias.
Prospects of the oil and gas industry
Attacks by the Russian army on infrastructure facilities caused considerable damage to the energy sector of Ukraine. The oil and gas industry was also affected. In particular, repeated missile attacks on the Kremenchug Refinery caused unprecedented destruction and damage to the processing industry. Accidents and explosions at gas stoves are also a consequence of hostilities.
Despite all this, the return of the largest oil and gas companies to the actual control of the state gave results, even in spite of the war. Records are even being set in the industry. For example, in April of this year, BU “Ukrburgaz” (a division of Naftogaz of Ukraine, which is responsible for preparation for production) set a historical record for drilling – 40,059 meters. This is 24% more than the previous record, which was recorded in November 2023.
As for the achievements of oil production, in 2022 the risks of drilling were minimized. Then, for the first time in 11 years, a 3D seismic survey of the deposit was carried out on an area of 98 square meters. km In April, JSC “Ukrnafta” completed the transfer of special permits for the use of fields to the contours of productive deposits. After that, the company issued the relevant documents at the State Geodesy. All these are the first steps towards a rapid increase in oil production in the country.
As a result, already during the first quarter, gas production increased by 12%. At the same time, the planned indicators were exceeded not only in the relatively safe central and western regions, but also in the eastern ones – where there are constant threats of shelling. So the industry is developing despite the war.
The consequences of increasing the volume of oil and gas production and increasing the level of transparency in the industry will not only be an increase in tax revenues to the state budget. The development of oil and gas production will increase the level of energy independence of the country, which is extremely relevant today, when the energy sector is under attack.
