Ukrnafta plans to launch gas station network, double production

8 May, 05:27 PM
Ukrnafta plans to allocate almost UAH 3 billion to the reconstruction and modernization of the gas station network (Photo:Ukrnafta)

Ukrnafta plans to allocate almost UAH 3 billion to the reconstruction and modernization of the gas station network (Photo:Ukrnafta)

The Ukrnafta national oil company plans to launch a network of 1,200 gas stations and double oil production, Ukrainian news outlet reported on May 8, with reference to a Finance Ministry’s conclusion on the company’s draft financial plan for 2023.

The document reads that the strategic plan envisages significant growth rates: doubling oil production from 1.5 million tons per year to 3.0 million tons per year, drilling 40 new wells, as well as an increase in gas stations from 450 in 2023 to 694 in 2024, and 1,200 in 2027.

The company also plans to increase capital investments from UAH 9.2 billion ($251.5 million) in 2023 to UAH 18.6 billion ($508.6 million) in 2024, and UAH 35 billion ($957.1 million) in 2025.

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In addition, Ukrnafta plans to allocate almost UAH 3 billion ($82 million) for the reconstruction and modernization of its gas station network, and another UAH 3.2 billion ($87.5 million) for the purchase of goods and petroleum products, as well as logistics costs for the gas station network.

The company is also expected to increase its net income by 81%, from UAH 40.87 billion ($1.1 billion) to UAH 74.05 billion ($2 billion) in 2023, while its net profit will reach UAH 12 billion ($328.1 million). Payments to the state will amount to UAH 6.9 billion ($188.6 million), including UAH 344 million ($9.4 million) as dividends.

The financial plan was formed based on the assumption that 50% of the current gas production, or 278 million cubic meters, will be transferred to Naftogaz of Ukraine under the previously received advance payment under the 2020 contract. In this case, the deal will be fully completed by late November. A total of 18% out of the total production volume of one billion cubic meters will be directed to joint activities.

Meanwhile, the Finance Ministry in its conclusion to the draft financial plan pointed to several violations. In particular, the prohibition of commercial processing of raw materials of own production and the absence of some necessary indicators.

In one comment, the ministry recommends that Ukrnafta finalize the draft financial plan in terms of the justification of planned amounts of taxes, fees and other mandatory payments to the state budget.

The ministry also stressed that they consider it necessary to conduct a thorough audit of Ukrnafta, which will allow the actual state of the company’s affairs to be analyzed.

Earlier Ukrnafta announced plans to resume oil production at about 500 idle wells.

On Nov. 7, 2022, Ukrnafta, Ukrtatnafta and several other enterprises became state-owned.

Serhiy Koretskyi was appointed Ukrnafta’s new CEO.

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