"Ukrgazvydobuvannya" burns gas for the population on torches
On July 22, at the presentation of the new strategy of JSC "Ukrgazvydobuvannya" entitled "More money for the state", the head of the "Gas" division of Naftogaz of Ukraine, and concurrently acting Andriy Favorov, chairman of the board of UHD, explained the source of the increase in production and technological losses (VTV)
According to him, the lion's share of technological losses are losses associated with the burning of natural gas on torches, given the lack of connection to the infrastructure. The presentation shows that the state-owned company has invested about UAH 23.1 billion in drilling wells over the past 4 years, but part of the extracted gas was flared (see Table) due to the lack of infrastructure.
"I will be frank. When I took office, this was the first thing (VTV - NR problems) that I paid attention to, and I set myself the goal of dealing with it in detail. We conducted a full audit, both on our own and with the involvement of auditors of the National Academy of Sciences for an answer to the question of what happened. I will say yes, there are two components. There are objective components that lead to an increase in technical losses. The more we work, the more blowdown we will have, and the more gas we need for compressor stations. The more successful wells, until Orie received flow rates, but are not connected to the infrastructure, the more we are forced to throw gas on flares while the connection process is going on. But, there were also subjective factors. I will not give up on them. There were revised norms that caused followed by an increase in technological costs on paper. Organizational personnel decisions were made on this matter and now the "bench" is closed. now the numbers you will see are the numbers we can believe in. That's all I wanted to say about the issue," Andriy Favorov said yesterday in the presence of Naftogaz head Andriy Kobolev.
According to the oil market's calculations, financial losses from accidents in 2016-2018 amounted to UAH 14.27 billion - an amount that exceeds Ukrgazvydobuvannya's investments in "modernization, development of competencies and support of integral infrastructure - UAH 12 billion" (purchase of drilling rigs and special equipment, hydraulic fracturing operations, well repair, seismic, etc.).
In addition, according to the information of the oil market, the company is obliged to pay rent payments from all extracted gas, including PTP. Thus, "Ukrgazvydobuvannya" suffered ADDITIONAL financial losses in 2016-2018 in the amount of up to UAH 2 billion.
However, in the press service of JSC "Ukrgazvydobuvannya", despite the presentation of the structure of losses, as well as the speeches of the head of the integrated division "GAZ" Andriy Favorov, they continue to point out that the main category of process gas consumption at the company is blowdown of wells, the volumes of which increased in 2018 in as a result of the revision of standards for the number and average duration of well blowdown in the direction of increase.
"When we are engaged in operations for purging, we do not have a counter on the node that could show how much gas we used for "purging". We make a plus-minus theoretical fiction. Theoretical fiction always allows for right or wrong in the display of these numbers. This is the first. Now, having reviewed the regulatory framework according to the best standards both in Ukraine and internationally, I feel much more comfortable that our volumes are real and not those exhibited using the Dovgii meto ... But, this is no longer important because now all the employees of "Ukrgazvydobuvannya" have all the KPIs that are set in mind: 1) EBITDA - the company's profitability, 2) commercial volumes of oil equivalent so that there is a motivation to extract both oil and gas and condensate. I don't want to make excuses, explain anymore, the page has been turned, let's move on," said Favorov.
As a reminder, according to the results of production activities in January-June 2019, JSC "Ukrgazvydobuvannya" increased natural gas losses to 811.9 million m3, or 36.5% more, compared to the indicators in the first half of 2018. If the existing dynamics are maintained, the state-owned company has there is every chance to increase gas losses to 1.6 billion m3 by the end of 2019.
Naftorynok