The Naftogaz Exploration and Production Division continues to implement its production program aimed at building up the resource base and increasing production efficiency at depleted fields under adverse external factors.

As of 9 months of 2020, the production of commercial gas supplied to end consumers and heat producers remains stable and amounts to 10.135 BCM of gas. Deviation from similar indicators of the previous year is minus 0.5% or 47.8 MCM of blue flame gas.

The company maintains its hydrocarbon production figures for the third quarter in a row, with the critical fields depleted by more than 75%. Moreover, the crisis situation in the market was aggravated by the following external factors:

• low gas prices, which significantly reduce opportunities for investment in production activities;
• a four-month delay in drilling operations at 11 wells due to the lack of official government approvals;
• delayed delivery of equipment and materials due to quarantine restrictions;
• complicated and time-consuming procedures for attracting contractors under the Public Procurement Law.

“We will have a difficult 4th quarter because we will experience the cumulative effect of multiple negative factors at once, which may add to the deviation from last year's figures. The company was preparing for the crisis, and our focus on the most promising projects and operating efficiency allowed us to maintain production. However, force majeure circumstances such as the delayed drilling of 11 wells, some of which were to be put into production in the second half of 2020, add pressure to our performance. We are currently looking for compensatory mechanisms that will address the consequences,” said Oleksandr Romanyuk, Director of the Exploration and Production Division. – At the same time, not only current performance is important for us as today we are considering gas production in the medium and long term. Our team is currently developing a new strategy for the development of Naftogaz's resource base to be presented by the end of the year. Ukrainian subsoil has significant potential, and its implementation requires time, financial resources, and government support.”

We managed to maintain natural gas production volumes due to the modernization and construction of ground infrastructure facilities, implementation of the program for the development and follow-up exploration of existing fields and development of green fields. Since the beginning of 2020, the divisions of Naftogaz Group have completed the following operations as part of the production program:

• drilling of 27 wells completed;
• 210 workover operations completed;
• 75 hydraulic fracturing operations completed;
• 551 coiled tubing operations completed;
• 4 gas treatment units reconstructed;
• 4 gas pipelines and 66.8 km of loops constructed.

It is worth mentioning that in October the Naftogaz Exploration and Production Division put a superdeep gas well (6,040 m) at the Komyshnianske field into production, whose daily production rate continues to grow and already exceeds 200 TCM of gas.