OREANDA-NEWS. DTEK has acquired a controlling stake in Naftogazvydobuvannya, Ukraine's largest private gas producer.

Naftogazvydobuvannya develops the Semyrenkivske and Machukhske fields in Poltava region, with proved reserves of 20 bln cubic meters of gas and 2 mln tons of gas concentrate. By the end of 2013, the company plans to produce 500 mln cubic meters of gas, and to increase output in 2014 to 1 bln cubic meters. According to its new investment program, UAH 1.4 bln will be invested next year to develop production.

“To reach its goal, Naftogazvydobuvannya will need professional management, access to investment, and shareholders with a clear vision of the company's future,” said DTEK CEO Maxim Timchenko. “Igor Shchurov, who now heads the company, is making significant changes. The company is upgrading its technical infrastructure, bringing its business processes and workflow in accordance with modern standards, and setting up an effective health and safety system. The new investment program was designed to boost gas and condensate production. Increasing internal gas production is not only one of DTEK's strategic goals, but also our contribution to Ukraine's energy security.”

Naftogazvydobuvannya is currently operating ten wells. In the last six months, the company started to upgrade them, which it plans to complete in 2014. Furthermore, each well is now being examined in order to determine the most efficient operating parameters in accordance with modern technologies for gas production. Due to these efforts, in six months, the company managed to increase the output of each upgraded facility by 30% on average.

Naftogazvydobuvannya has started drilling new wells. In the Semyrenkivske field, a new well will be commissioned by the end of this year. Next year three more wells will be put in operation. The company has already started drilling a new well with a design depth of 8,000 meters, which makes it one of the deepest not only in Ukraine, but in Europe. Aside from increased gas and condensate output, the project will also provide valuable geological data essential for the field. The company will invest about UAH 700 million in the construction and commissioning of new wells in 2014.

For the first time in its history, the company launched a program to geologically and technically assess its formations, wells, and development areas. The findings will help maximize the output of producing formations and determine optimal locations for new wells. The first two years of the program will cost over UAH 80 million.

In 2013-2014, the company will spend over UAH 70 million on a new gas preparation unit, which will be put in operation in the first half of 2014. The new unit will satisfy demand for more processing capacity that is required to ensure a marketable quality of produced gas. Other projects to improve infrastructure include the construction of a set of storage tanks for gas condensate, new gas pipelines, electricity transmission lines, transformer substations, roads, etc.

Due to the increase in production, over 70 new jobs will be created. The company is introducing new approaches to occupational health and safety. Employees have been provided with new personal protection equipment. In December Naftogazvydobuvannya started setting up a health and safety management system according to international standard OHSAS 18001:2007.

Naftogazvydobuvannya is developing social partnerships with three districts in Poltava region: Shyshatskyi, Myrhorodskyi and Poltavskyi, using the same approach DTEK applies in over 30 towns and districts across Ukraine. Before the end of the year, the gas producer will allocate over UAH 800,000 for social projects in the Shyshatskyi and Myrhorodskyi districts. This money will pay for new emergency cars for the Shyshatskyi district hospital, repairs at the local community centre, energy efficiency improvement at a hostel for people with disabilities, and new street lighting in the village of Kovalivka. Furthermore, the company plans to equip natural gas metering stations in two schools in Myrhorodskyi district.

“The executive team of Naftogazvydobuvannya is now faced with the task of developing the company's strategy for the coming years and setting development priorities and planned investment amounts,” says Igor Shchurov, Naftogazvydobuvannya's general director. “We need DTEK's managerial experience to build efficient and transparent business processes and introduce best practices in health & safety and social policy. I believe that DTEK's strategic guidance and the industry expertise of our new team will bring tangible results in the nearest future.”