07.02.03

Ukrgazdobycha gas production up 1.3% in 2002

Ukrgazdobycha, a subsidiary of Naftohaz Ukrayiny, increased gas production 1.3% year-on-year to 13.722 billion cubic meters in 2002, the company's General Director Ilya Rybchich said at a press conference on Wednesday.

He said that in 2003 the company would increase gas production to 13.9 billion - 14 billion cubic meters.

Ukrgazdobycha net profit fell 63% year-on-year to amount to 345 million hryvna in 2002. It is planned to increase net profit to 400 million hryvna this year.

Investment in the development of gas production in 2003 will amount to 1.38 billion hryvna compared with investment in 2001-2202 of 1.1 billion - 1.2 billion hryvna.

"The company drilled through 255,000 meters last year, including 145,000 meters of exploration drilling and 115,000 meters of production drilling. The company increased its reserves last year by 16.1 bcm, and in the entire time it has been in operation (1999-2002) - by 51.2 bcm," the general director said.

Rybchich said at the press conference that he considers it economically inexpedient and dangerous to give the status of corporate entity to Shebelinkagazdobycha and Kharkivgasdobycha.

He added that after considering this issue the Naftohaz Ukrayiny supervisory board reached the same conclusion.

"Then all the governors would tomorrow bring up the issue of the separation, as a result of which the company will not be able to invest in developing production," he said.

As an example, he noted Shebelinkagazdobycha, which produces about 5.8 bcm of gas per annum. "Based on gas prices to the public of 122 hryvna per 1,000 cubic meters (not including transportation) this amounts to 600 million hryvna, half of which is costs and half - tax, which leaves no money for development," he said.

Rybchich reminded that Kharkivgasdobycha produces hydrocarbons in Dnepropetrovsk, Poltava and Kharkiv regions and Shebelinkagazdobycha - in Donetsk, Lugansk, Poltava and Kharkiv regions.

Ukrgazdobycha produces over 70% of Ukraine's gas. At the end of 2002 the company has 108 fields on its balance sheet (primarily gas and gas condensate fields).