The Slovak company has been working in Ukraine's west since 2016.
Slovak-based NAFTA a.s. (part of the EPH holding), which will act as technical operator under a production sharing agreement on the Yuzivska gas field in eastern Ukraine, is getting ready to drill.
On August 13, EP Power Europe (EPPE), part of the EPH international energy holding, officially informed about its decision to acquire from Emerstone Energy S.C. Sp. investment fund (Luxembourg) 100% of shares of Dutch-registered Yuzgaz B. V., which has won a tender to develop the Yuzivska gas field located between Donetsk and Kharkiv regions, eastern Ukraine.
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EPPE also provided Ukraine's Cabinet of Ministers with guarantees that work under the contract on the Yuzivska gas field will be done in full and on time. The company is now waiting for a decision by the Ukrainian government.
Under the production sharing agreement, Slovakia's NAFTA will be engaged in geological prospecting and extracting hydrocarbons at the Yuzivska field. The company boasts more than one hundred years' experience in oil and gas production in Europe, Asia and the Middle East. It has been working in Ukraine's west since 2016.
NAFTA E&P Deputy Director (Slovakia), CNG LLC Executive Director (Ukraine) Martin Slovák confirmed the information on the Yuzivska project, which was posted Nadra Yuzivska LLC's website on August 10.
In case of a positive decision by the Ukrainian government and the signing of amendments to the production sharing agreement, NAFTA will launch operations at the Yuzivska field to produce 20-30 million cubic meters (mcm) of gas in a year and is expected to increase output to 100 mcm in two years. Simultaneously with the so-called early gas production, a comprehensive geological survey of the Yuzivska gas field will be carried out.
Under the base-case scenario, investors plan to produce 1 billion cubic meters (bcm) in 2022 and then to boost production to 6-7 bcm of gas in three or four years per year and keep the output at the set level for 20 years. The national budget's extra annual revenue from natural gas production is expected to reach UAH 7-8 billion (US$257-294 million).
As was earlier reported, the guaranteed investment in the Yuzivska project during the first five years will total $200 million. Overall investment in the project in the case of successful exploration can reach several billion dollars.
The only final beneficiary of Yuzgaz B. V. via the EPN holding will be Czech citizen, Forbes billionaire Daniel Křetínský.
As UNIAN reported earlier, the Ukrainian government committee on August 9, 2018, approved a draft resolution on exploration and extraction of gas at the Yuzivska gas field under the production sharing agreement.