Modern economic POTENTIAL OF UKRAINE

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Oil extraction industry

The volume of prospecting drilling is forecast to increase to 185 ths. tons per annum by 2010, which is almost 6 times higher than the actual volume of the same oil works in 2004. Under these conditions, the explored reserves of oil and condensed gas can grow from the 63 mn tons of oil recorded in 2004 to 150 mn tons before 2030.

There are plans to increase the oil extraction ratio and the coefficient of hydrocarbon raw production up to 7% of aggregate oil production volume or 5.4 mn tons in 2030.

Oil and gas production in the forecast period is expected be performed by domestic companies, which will preserve their ownership forms at the current level. The Ukrainian government will retain state ownership of NaftoGaz Ukraine National JSC (Oil and Gas Ukraine). The state will keep a 50%+1 share interest in UkrNafta OJSC (Ukrainian Oil).

Deep-water Black Sea prospecting and production of natural gas and petroleum should involve the investment and state-of-the-art technical capabilities of international oil and gas companies.

The top priorities in solving the problems of the oil extraction industry are:

• developing the legislation and procedures for issuing individual licenses for the prospecting for and exploring of oil deposits;
• simplifying the procedure to allot land for constructing oil and gas wells and downstream infrastructure;
• completion of the delimitation of borders with Russia and Romania in the Black and Azov seas;
• refinement of shelf exploring programs for the Black and Azov seas; and
• drafting the legislation and procedures aimed at stimulating the wide application of knowledge-intensive and high-cost technologies for more intensive hydrocarbon production.

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