Ukrnafta continues upgrading pumping equipment
Ukrnafta continues upgrading pumping equipment

PJSC Ukrnafta is completing a number of tenders for pumping equipment to upgrade the existing fleet of electrical submersible pumps (ESPs). The company will procure 18 all-new complete ESP systems, 121 ESP replacement sections, 90 gas separators and 166 electrical submersible motors. Ukrnafta invited 4 new producers of equipment to participate in the tenders thereby increasing the competition among the suppliers, in line with the company’s strategy to improve the quality and transparency of the procurement process. The company expects to sign the contracts and receive the equipment in 2nd and 3rd quarter of 2017.

The replacement of pumping equipment will enable Ukrnafta to stabilize production under the conditions of limited investments. The company expects that such investments are critical to maintain basic production systems, safety and asset integrity, as well as ensure sustainable tax revenues. Last year, the company deployed more productive ESPs at 21 wells operated by Dolynanaftogas, Ukrnafta’s production division in Western Ukraine, which increased the aggregate daily yield 2.5 times to 145 tons of oil per day. Based on the favorable results of the last-year ESP replacement pilot project the company made the decision to deploy more productive ESPs at its other wells.

In 2017, Ukrnafta expects to increase its investment program to UAH 2.5 bln reinvesting all savings from the reduction of the oil rent. The bulk of investments will be made in the upstream to maintain and upgrade basic production systems, including replacement of tubing, workovers, as well as to increase yields from the existing wells through deployment of ESPs, use of waterflooding and other production intensification methods. The company also plans to increase its investments in drilling, retail and IT systems. However, the implementation of the investment program will depend among other thing on the position of the fiscal authorities concerning the mechanism for repayment of the company’s tax debt.