Production Results for 2017
Production Results for 2017

PJSC Ukrnafta announces its production results for the fourth quarter and 12 months of 2017*.

 Highlights

  • Average daily production of liquids growing in 1H2017 declines in 3Q2017 following blocking of Ukrnafta’s licenses by the state;
  • Average daily production of liquids and gas growing in 4Q2017 after Ukrnafta restores production at 6 fields, suspended in 2017 due to non-extension of the licenses;
  • Crude oil and condensate production for 2017 at 1.4 mln tonnes;
  • Gas production for 2017 at 1.1 bln m3;
  • LPG production for 2017 at 116 ktonnes.
 

4Q2017

4Q2016

2017

2016

Change, %

Production of crude oil and condensate, ktonnes

337

374

1 379

1 518

(9.2)%

Gas production,  mln m3

251

323

1 108

1 301

(14.8)%

Production of LPG, ktonnes

27

36

116

134

(13.4)%

In 2017, production of hydrocarbons and LPG at Ukrnafta declined compared to the previous year. During the period from January to June, the average daily production of liquids increased by 2% to 4.1 ktonnes, declining to around 3.3 ktonnes in July-October as the company was forced to suspend operations at 6 fields. The daily production rate restored, albeit not fully, in November-December 2017.

The main reason behind the production decline is blocking of extension of licenses by the government. Had the licenses been extended in a timely fashion, production of oil and condensate would have been stable throughout the year and the production decline would have been one third of the actual level.

As the company was forced to suspend operations at 6 fields it lost over 92 ktonnes of liquids and 76 mln m3 of gas during the stoppage.

At the same time, Ukrnafta increased the rate of production of hydrocarbons in 4Q2017. The average daily production of oil and condensate improved by 15% from 3.3 ktonnes a day in October to 3.8 ktonnes a day in December. Likewise, over the same period the average daily production of gas increased by 12% from 2.6 mln m3 to 2.9 mln m3 a day, and production of LPG went up by 30% to 325 tonnes a day. The improvement in production rates follow the extension of the licenses and restoration of production at the 6 fields suspended throughout 2017 due to the licenses problems.

The positive trends notwithstanding, the average daily rates of production of hydrocarbons have not yet restored to the previous levels. In 1Q2017 prior to the suspension of the first of the six fields the company produced on average 4.1 ktonnes of oil and condensate and 3.5 mln m3 of gas.

 

Note to editors

In the course of 2017, 9 of Ukrnafta’s production licenses expired. The company attempts to renew the licenses were blocked by the State Geological Service and between April and June 2017 Ukrnafta was forced to suspend production at 6 fields. The company won a number of court cases challenging the regulator’s inaction concerning the extension of the licenses. In late October and November after the company received the extended licenses and mining allotments, Ukrnafta was able to restore operations at the suspended fields.

Before the end of 2017, Ukrnafta submitted to the State Geological Service applications to extend 27 licenses expiring in 2018, which account for 24% of annual production of liquids and 18% of annual production of gas.

* The company will announce the audited financial results in late April 2018.

 

For more information please contact press office: +38 044 239 14 93