Ukraine Oil and Gas Report

 Published On: Jul, 2016 |    No of Pages: 81 |  Published By: BMI Oil and Gas | Format: PDF
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BMI View: A volatile security situation and continuing geopolitical tensions hamper exploration and production activities in Ukraine. Regulatory challenges, illustrated by recent tax hikes on oil, gas and mineral extraction, are expected to act as a further deterrent to investment in Ukraine's oil and gas sector. Despite Ukraine's significant gas supply diversification efforts, we expect the country will continue to depend to some extent on Russian gas supplies over the coming winters.

Key forecasts and developments:
-We maintain our forecasts for oil and gas reserves this quarter. However, we note that Chevron and Shell's exits from their respective shale gas exploration projects create increasing downside risk to our gas reserves forecasts.
-Downside risk to oil production exists over the coming year from a tax dispute between Ukrnafta and the Ukrainian state. In March 2016 the company received a formal notification from the State Service of Geology & Mineral Resources of Ukraine that 16 of its licenses could be suspended, in addition to three recent suspensions. According to the company, the suspension of these licenses would stop production of about 6,500b/d of crude oil, a significant proportion of the company's production and of the country's total 38,000b/d crude and condensates production in 2016.
-Most of Ukraine's refineries remain closed as of 2016, leading to a severe underutilisation of its refining capacity. We maintain this situation will endure until an amelioration in the political, economic and security situation comes through.
-Given the country's disastrous refining sector, crude net imports have fallen substantially over the past decade and are expected to remain low over the coming decade. Nevertheless, this has also translated into increasing refined products import requirements, as domestic production is insufficient to meet demand. Net imports of refined products will pick up speed as consumption recovers. This is unlikely to change unless the refining sector undergoes a significant revamp.

BMI Industry View ....... 7
Table: Headline Forecasts (Ukraine 2014-2020) . . . 7
SWOT .... 9
Oil & Gas SWOT ....... 9
Industry Forecast ...... 11
Upstream Exploration ...... 11
Latest Updates ....... 11
Structural Trends ... 11
Upstream Projects ... 14
Table: Key Upstream Projects In Ukraine 14
Upstream Production - Oil 15
Latest Updates ....... 15
Structural Trends ... 15
Table: Oil Production (Ukraine 2014-2019) . . 17
Table: Oil Production (Ukraine 2020-2025) . . 17
Upstream Production - Gas ....... 18
Latest Updates ....... 18
Structural Trends ... 18
Table: Gas Production (Ukraine 2014-2019) . 21
Table: Gas Production (Ukraine 2020-2025) . 21
Refining . 22
Latest Updates ....... 22
Structural Trends ... 22
Table: Refining Capacity and Refined Products Production (Ukraine 2014-2019) . . . 24
Table: Refining Capacity and Refined Products Production (Ukraine 2020-2025) . . . 24
Refined Fuel Consumption 25
Latest Updates ....... 25
Structural Trends ... 25
Table: Refined Products Consumption* (Ukraine 2014-2019) . . . . 27
Table: Refined Products Consumption* (Ukraine 2020-2025) . . . . 27
Gas Consumption .... 28
Latest Updates ....... 28
Structural Trends ... 28
Table: Gas Consumption (Ukraine 2014-2019) . . . . 31
Table: Gas Consumption (Ukraine 2020-2025) . . . . 31
Trade - Oil ..... 32
Crude Oil ..... 32
Latest Updates ....... 32
Structural Trends ... 32
Table: Crude Oil Net Exports (Ukraine 2014-2020) . . . . 34
Table: Crude Oil Net Exports (Ukraine 2020-2025) . . . . 34
Refined Fuels 34
Latest Updates ....... 34
Structural Trends ... 34
Table: Refined Fuels Net Exports (Ukraine 2014-2019) 36
Table: Refined Fuels Net Exports (Ukraine 2020-2025) 36
Trade - Gas (Pipeline And LNG) 37
Latest Updates ....... 37
Structural Trends ... 37
Table: Reverse Flow Gas Pipeline Connection Capacity From EU To Ukraine . 40
Table: Gas Net Exports (Ukraine 2014-2019) . 41
Table: Gas Net Exports (Ukraine 2020-2025) . 41
Industry Risk Reward Ratings .. 42
Central And Eastern Europe Oil & Gas Risk/Reward Index ..... 42
Table: CEE: High Risk, Low Reward 42
Table: CEE Upstream, Downstream And Overall Risk/Reward Index . 43
Upstream: China Still The Target Market ... 43
Table: CEE Upstream Risk/Reward Index 45
Downstream: Turkish STAR Only Bright Spot In Weak Market ....... 46
Table: CEE Downstream Risk/Reward Index . 48
Ukraine - Risk/Reward Index ..... 50
Market Overview ....... 52
Ukraine Energy Market Overview ....... 52
Regulatory Structure ....... 52
Fiscal Regime 53
Table: Ukraine Fiscal Regime Terms 53
Licensing Regime ... 54
Table: Ukraine Licensing Regime . . . 55
Oil And Gas Infrastructure 56
Oil Refineries 56
Table: Refineries In Ukraine . . . . 56
Oil Pipelines . 57
LNG Terminals ...... 58
Gas Storage .. 59
Gas Pipelines 59
Competitive Landscape .... 62
Competitive Landscape Summary ...... 62
Table: Key Players - Ukraine Oil And Gas Sector . 63
Table: Key Upstream Players . . 63
Table: Key Downstream Players . . . . 63
Company Profile 64
Naftogaz Ukrainy .... 64
Company Overview 64
Table: Key Financial Data (UAHmn) . . . . 65
Regional Overview .... 66
Central And Eastern Europe Oil & Gas Regional Overview ..... 66
Oil Production: Oil Powerhouses Falter On Weak Prices ..... 66
Oil Consumption: Short-Term Weakness As Russia Struggles . 67
Refining Capacity: Modernisation Key To Competing ... 68
Natural Gas Production: Gas Ramp-Up Demand Dependent .. 69
Table: Central Asia-China Gas Pipeline Expansions . . . 70
Gas Consumption: Demand Falters On Struggling Economies 71
Table: Central & Eastern Europe Oil & Gas Production & Consumption, Refining Capacity & Trade . 72
Glossary ..... 74
Table: Glossary Of Terms . 74
Methodology ...... 76
Industry Forecast Methodology 76
Source . 78
Risk/Reward Index Methodology ....... 78
Table: Bmi's Oil & Gas Upstream Risk/Reward Index . . 80
Table: Weighting 81
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