Naftogaz Group produced in 2020 produced 13.45 bcm of commercial gas, 2% more than the production target and 1% less than in 2019. The company minimised the rate of production decline in the face of quarantine restrictions, a 30% reduction in the average annual gas price and a 50% reduction in investments. To increase production in the long term, Naftogaz started implementation of the Resource Base Development Strategy.

The new Strategy calls for doubling the Company's hydrocarbon reserves over the next 10 years. To develop and implement the Strategy, in 2020, Naftogaz transformed its core business: revised its organizational structure and strengthened the team with experts with the track-record in such international companies as Shell, ExxonMobil, ENI, etc. The new team deepened the Company's technical expertise. Additionally, Exploration and Production Division of Naftogaz established an External Expert Board of eleven leading Ukrainian scientists and practitioners.

“We have already started working on the large-scale projects under the new Strategy using the resource opportunities that the government has unblocked for us. We are talking about the Black Sea shelf, Yuzivska area, and four large oil and gas areas under the signed Production Sharing Agreements (PSAs) – an internationally recognized industry-specific cooperation mechanism, which enhances the chances of international investors’ return to Ukraine's oil and gas sector. Under the PSAs, we plan to start seismic surveys in 2021, exploration and appraisal drilling in 2022. The plans of Naftogaz also call for attracting international partners to Ukraine, thus increasing investment capital, access to technologies and expertise. I am confident that the successful implementation of these large-scale projects will propel Ukrainian gas production to the next level. Our ultimate goal is the country's energy independence,” Oleksandr Romanyuk, Director of the Naftogaz Exploration and Production Division said.

The turbulent year of 2020 led to a crisis in the global oil and gas market and became the toughest for in the past decade. At the same time, Naftogaz has exceeded its production targets due to the anti-crisis plan and a new team. Compared to 2019, the Company has stabilized production with a deviation of minus 1%.

Otto Waterlander, Chief Operating Officer of Naftogaz Group, added: “In the context of optimised investments and operating expenses, our team managed to properly focus its activities. We managed to minimise the negative consequences of the quarantine restrictions, which compelled us to delay drilling of 12 new wells, and we also managed to overcome the delays in the supply of equipment, goods and services due to the complicated procurement procedure and extended procurement terms under the new legal requirements enforced in April 2020.”

2020 key operational results:

• – Improved production safety, 0 fatalities in 2020
• – Sales gas production of 13.45 bcm (2% more than the target, 1% less than in 2019)
• – 41 new wells commissioned. Average flow rate from the new wells increased by 14% compared to 2019
• – Two green fields discovered: Zhemchyuzhne and Pivnichno-Kuzmychivske
• – Key surface infrastructure facilities are modernised: Chervonodonetska, Yablunivska, Khrestyshchenska booster compressor stations with the total investment of USD 125 mln
• – Well No. 888 of the Shebelynske field completed; it is currently being tested and stimulated
• – Partnership with the international Expert Petroleum Company to enhance production at 13 depleted fields in Western Ukraine (under Product Enhancement Contract)
• – The state-of-art 3D field modelling centre established in Ukraine; it will improve the efficiency of planning and hydrocarbon deposits development