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Gassing about Ukraine

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Oilfield Technology,

Ukraine’s oil and gas production appears to have been largely unaffected by the ongoing crisis involving Russia’s annexation of Crimea and the uprising of pro-Russian separatists in the east of the country. Most of the Black Sea state’s producing gas fields are located away from the areas of unrest, therefore through geographical location have avoided disruption. However, Ukraine has lost control of its offshore deposits due to their location in Crimean waters – with the local authorities due to hand over producer Chernomornaftogaz to Russian state-player Gazprom. Douglas-Westwood (DW) predict this will lead to Ukraine losing out on approximately 117 million bbls equivalent of gas production over the next seven years. This would have seen 50 offshore well completions over the period.

DW’s current base case for Ukraine estimates onshore gas production will reach 335 000 boepd in 2020 – requiring around 40 wells completions a year. This assumes small-scale unconventional developments in the latter part of the decade which will reverse declining output. These will gradually ramp up over time, but it is unlikely significant output will be seen before next decade.

The current situation has highlighted the country’s need to wean itself off of Russian gas imports. Could Ukraine’s sizeable unconventional gas plays – which the EIA estimate at 24 billion boe – provide the answer to this? Pressure from the void left by reduced Russian gas imports may see production reach over 400 000 boepd by the end of the decade, requiring gas well completions to rise 70% to 68, from 38 in 2013.

Matt Cook, Douglas-Westwood London

Adapted from a press release by David Bizley

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