Government facilitates the resumption of activities on a strategic oil and gas field

Today, by its decision the Cabinet of Ministers gave Naftogaz Ukrainy the opportunity to acquire a 100% stake in Nadra Yuzivska LLC, which owns the right to explore and extract hydrocarbons in the Yuzivska section in Donetsk and Kharkiv regions. This is another step taken by the Government towards improving the efficiency of subsoil potential and increasing domestic gas production.

Yuzivska Area is one of the largest oil and gas fields in Ukraine, but exploration activities have not been carried out there for several years. In 2012, an investor, Shell international company, was involved in its development, but it withdrew from the project due to Russian aggression, as Yuzivska Area borders the occupied territories in the east of the country. A second attempt to attract an investor took place in a non-transparent manner and led to a lack of results - the search for hydrocarbons within the site has never begun.

Due to the downtime for Yuzivska Area, the state fails to receive domestic gas and additional revenues to the budget at a time when the largest fields in Ukraine, which have long been developed, are depleted.

To promptly and effectively resume work on Yuzivska Area, the Government has decided to involve a state-owned company, Naftogaz Ukrayiny. It will be capable of starting work on the site in the shortest possible time because it has already been engaged in the development of the deposits in the immediate vicinity of it, it also possesses the appropriate experience and expertise.

Yuzivska Area is a strategic asset for Ukraine, but its development currently involves a number of economic and political risks. Naftogaz is the optimal partner of the state, which expresses readiness to take these risks and invest in the exploration of this area. This is not only a question of the prospect of extracting domestic gas, but also obtaining additional funds to state and local budgets. Moreover, this can be another impetus for the development of areas close to the demarcation line. By transferring the Yuzivska section to Naftogaz, the Government continues the course taken to increase the efficiency of development of the Ukrainian subsoil.