Ukraine has won a tender, receiving eleven sites for exploratory wells of expected fossil fuel fields in Libya, considered Africa’s leading oil country with proven reserves of up to four billion tons. The drilling will be done by the Ukrnafta (Ukrainian Oil) state corporation, a subsidiary of the Naftohaz Ukrayiny (Oil & Gas of Ukraine) state company. The project will be coordinated by the Naftohaz representation in that country, expected to open June 31, says CEO Yury Boiko.
This is not the only road tour for Naftohaz. Its subsidiaries will present a number of investment projects at a June 19 conference, Development of Ukraine’s Oil and Gas Sector, Foreign Investment Prospects, in Brussels. The public corporation’s press center told The Day that Ukrnafta will offer a gas-processing installation for the gas-processing factory at Kachanivka; Chornomornaftohaz (Black Sea Oil & Gas) state company will present a development project for the Odesa gas field on the Black Sea shelf; Ukrhazvydobutok (Ukrainian Gas Drilling) state company will offer to prospect anticipated oil and gas fields in the Orylsk and Sentianivka areas for subsequent supplementary exploration and development jointly with foreign investors.
At a press conference, Mr. Boiko shared another news item in the international sphere of the Ukrainian oil and gas sector. In view of the deadlocked transfer of Naftohaz Ukrayiny stock to Russia’s Gazprom (the latter could end up with some $700 million worth of tax liabilities), Ukraine will propose payments not with bonds but with gas received as payment for Russian gas transit across Ukraine. Boiko said the proposal is likely to be made by Premier Anatoly Kinakh when meeting with his Russian counterpart Mikhail Kasyanov in Kharkiv on June 21. Mr. Boiko believes that “Gazprom can’t avoid such payments without changing the law.” He said that the Gazprom leadership supported his proposal, and that this option became possible after Ukraine had saved considerable amounts of gas in its underground storage facilities by reducing consumption. In his words, some 7 billion cubic meters of gas, including 5 billion from Turkmenistan, was available by the beginning of June. Taking advantage of this gas surplus, Ukraine has made several export contracts, particularly with the Hungary’s MOL Company. Russia, habitually jealous of Ukrainian gas appearing on the European market, this time voiced no objection. The Naftohaz CEO stressed that this and lifting the export tax have been agreed upon between the Ukrainian leadership and Gazprom. “The scope and markets will be ascertained within three months,” said Mr. Boiko. Yet this makes one wonder. Russia is known for strange coincidences; making concessions in one aspect of bilateral relations coincides with a tougher stand in another. Moscow is not likely to let Ukrainian gas into Europe without getting something in return.
