Page 13 - 4711

Exxon Mobil in western part of Ukraine and the Dnieper-Donetsk basin. Among other
international companies that are interested in Ukrainian hydrocarbon resources are
Halliburton, Total, Enid, RWE Dealing terminals
To be less dependent on Russia’s gas supplies, Ukraine decided to construct terminal
for liquefied natural gas. With this terminal Ukraine could purchase gas from other producers
at spot prices that are now significantly lower than the price of contractual gas from Russia.
The Spanish company Scion won the tender for building LNG terminal in Ukraine. The
company recently has developed feasibility study of building such a terminal that will be
located in the area between the Black Sea and the oil terminal Yuzhnyy. Construction costs of
the LNG terminal are estimated to be about USD 1 bn with total capacity of 10 billion m3 per
year. To implement this ambitious project private investors will be attracted (the state’s share
will be only 25%). Future supplies could be made from the United States, Algeria or Qatar.
Oil and gas industry players in Ukraine could be divided into two separate groups:
subsidiaries of Naftogaz of Ukraine and other private companies.
The National Joint Stock Company Naftogaz of Ukraine is the leading enterprise in
Ukraine’s energy complex and one of the biggest Ukrainian companies. Naftogaz of Ukraine
produces one eighth of the gross domestic product of Ukraine and provides one tenth of the
State budget revenues. Naftogaz of Ukraine is a vertically integrated oil and gas company
engaged in full cycle of operations in gas and oil field exploration and development,
production and exploratory drilling, gas and oil transportation and storage, supply of natural
gas and LPG to consumers. Over 90% of the oil and gas in Ukraine is produced by Naftogaz
of Ukraine enterprises that provide full cycle of upstream and downstream operations in oil
and gas industry. Ukrainian government declared its plans to restructure Naftogaz of Ukraine.
Newly established companies, successors of Naftogaz of Ukraine, will be working in separate
spheres: oil and gas mining, transportation and trading.Leading players are national
companies.Leaders in oil and gas condensate extraction are also subsidiaries of Naftogaz of
Ukraine.
It is considered that restructuring of Naftogaz of Ukraine will increase investment
attractiveness of Ukrainian oil and gas industry through its decentralization. Among the
leaders by volumes of gas production there are 3 companies – subsidiaries of Naftogaz of
Ukraine: Ukrgazdobycha, State Chornomornaftogas, Ukrnafta (Naftogaz owns 50% +1
share).

Companies with foreign capital
One of the biggest non-state oil and gas companies in Ukraine with foreign
investments is Poltava Petroleum Company. Among its shareholders is British enterprise –
Oil&Gas.
Verkhovna Rada of Ukraine determines state policy in oil and gas industry and is
legislative regulator. Cabinet of Ministers of Ukraine and other authorized executive bodies
implement state policy in the oil and gas industry and manage it. Special permission must be
obtained from the State Service for Geology and Mineral Resources of Ukraine for the
following activities:
• Usage of oil and gas mineral resources;
• Search and exploration of oil and gas;
• Construction and exploitation of underground storage units for oil and gas.
There are several types of special permissions that may be obtained:
• Geological exploration of oil and gas mineral resources, including research and
industrial development of fields;
• Geological exploration of oil and gas mineral resources, including research and
industrial exploration, followed by extraction of minerals (industrial development of fields);

12