Overview of the Ukrainian Oil and Gas and Shale Gas Market Opportunities
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1/25 Overview of the Ukrainian Oil & Gas and Shale Gas Market Opportunities by Lyubomyr Goncharuk Adviser to the Minister of Ecology and Natural Resources of Ukraine Canada - Ukraine Oil & Gas Opportunities Workshop, Kyiv, February 25-26, 2013 2/25 CONTENTS 1. Reserves & Resources 2. Production & Consumption 3. Opportunities Canada - Ukraine Oil & Gas Opportunities Workshop, Kyiv, February 25-26, 2013 3/25 1. Reserves & Resources Canada - Ukraine Oil & Gas Opportunities Workshop, Kyiv, February 25-26, 2013 4/25 Canada - Ukraine Four oil and gas provinces are recognized Oil & Gas Opportunities in the country, including 11 oil-gas Workshop, Kyiv basins and 35 prospective areas. February 25-26, 2013 Hydrocarbon deposits are being exploited for oil, gas, and condensate in the following regions: Oil & Gas 1/2 • A – the Eastern Region (Dniprovsko- Donetska Depression and northwestern Crystalline basement slopes portion of Donbas); Voronezhska Volyno- Podilska Dniprovsko-Donetska Depression A Plate • B – the Western Region (Volyno- B Kyiv Anticline Lvivskiy Podilska Plate, Fore-Carpathians, Trough Fore-Carpathian Trough Folded Carpathians Folded Carpathians, and Trans- Donbas Transcarpathians UKRAINIAN SHIELD Carpathians); • C – the Southern Region 200 km Fore-Crimean Depression (Prychornomorya, Crimea, and the Azov Sea Fore- exclusive marine economic zone of the Dobrugean C Scythian Trough Plate Black Sea and Azov Sea offshore). Black Sea Mountain Crimea 5/25 Canada - Ukraine In 2011, production amounted to 2.4 million Oil & Gas Opportunities tons of oil, 0.9 million tons of condensate, Workshop, Kyiv and 20.6 billion cubic meters of natural gas. February 25-26, 2013 The State Inventory includes 187 oil deposits Oil & Gas 2/2 (121 in production), 202 condensate deposits (142 in production), and 380 natural Crystalline basement slopes gas deposits (224 in production). Voronezhska Volyno- Podilska Dniprovsko-Donetska Depression Plate Kyiv Anticline Lvivskiy Trough Fore-Carpathian Trough High Proven and probable reserves are Folded Carpathians Medium Donbas estimated to: Transcarpathians UKRAINIAN SHIELD • 133 million tons of oil 200 km Fore-Crimean • 66 million tons of condensate Depression Azov Sea • 1 trillion cubic meters of natural gas Fore- Dobrugean Trough Scythian Low Plate Black Sea Mountain Crimea 6/25 This is potentially an important non- Canada - Ukraine conventional additional hydrocarbon Oil & Gas Opportunities resource confined to coal deposits in the Workshop, Kyiv February 25-26, 2013 Donetskiy (A) and Lvivsko-Volynskiy (B) coal basins. The State Inventory comprises 200 Coalbed Methane deposits, of which 99 are in production. Proven and probable reserves of methane Crystalline basement slopes are estimated at 343 billion cubic meters. Voronezhska Volyno- Podilska Dniprovsko-Donetska Depression In 2011, production totaled to 760 million Plate B Kyiv Anticline cubic meters of methane. Lvivskiy Trough Fore-Carpathian Trough Folded Carpathians A Donbas Transcarpathians UKRAINIAN SHIELD 200 km Fore-Crimean Depression Azov Sea Fore- Dobrugean Trough Scythian Plate Black Sea Mountain Crimea 7/25 Non-conventional shale gas resources are not recorded yet in the State Inventory being preliminary estimated to Canada - Ukraine some trillions of cubic meters. Oil & Gas Opportunities Workshop, Kyiv Up to recent no research and practical exploration were February 25-26, 2013 conducted in Ukraine. Nevertheless, reconnaissance studies commenced last Shale Gas years in Donetskiy (A) and Lvivsko-Volynskiy (B) coal basins as well as Dniprovsko-Donetska (C) and Prychornomorska (D) depressions and Fore-Carpathian Crystalline basement slopes (E) and Fore-Dobruja (F) troughs (fold belts). Voronezhska Volyno- Podilska Dniprovsko-Donetska Depression Plate B In 2012, the shale gas field tender has Kyiv C Anticline Lvivskiy been organized for two sites located in the Trough Fore-Carpathian Trough Folded Carpathians areas A and B. The permits for 50 years Donbas Transcarpathians UKRAINIAN SHIELD A of exploration and production granted to E Shell (A, Yuzivska field, 7886 km2) and 2 200 km Fore-Crimean Chevron (B, Oleska field, 6324 km ), Depression D depth 10 km each. The total investments Azov Sea Fore- Dobrugean Trough Scythian F Plate required under PSA conditions are Black Sea Mountain Crimea estimated to $3.7 bln. in Yuzivska field and $3.1 bln. in Oleska field. 8/25 The State Inventory contains more than Canada - Ukraine 900 deposits with proven and probable Oil & Gas Opportunities reserves, located in Donetskiy ( ) and Workshop, Kyiv A February 25-26, 2013 Lvivsko-Volynskiy (B) coal basins, of which 400 are being exploited underground. Coal Ukraine’s proven and probable coal reserves are estimated at 53 billion tons. Crystalline basement slopes In 2011, production totaled to 69 Mt. Voronezhska Volyno- Podilska Dniprovsko-Donetska Depression Plate B Kyiv Anticline Lvivskiy Trough Fore-Carpathian Trough Folded Carpathians Donbas Transcarpathians UKRAINIAN SHIELD A 200 km Fore-Crimean Depression Azov Sea Fore- Dobrugean Trough Scythian Plate Black Sea Mountain Crimea 9/25 2. Production & Consumption Canada - Ukraine Oil & Gas Opportunities Workshop, Kyiv, February 25-26, 2013 10/25 Hard Fuels (source: www.ukrstat.gov.ua) 64 700 559 544 639 61,8 62 61,7 600 2003-2011 60 58,9 500 60,4 59,5 449 59,8 430 58 59,4 462 400 395 56 358 300 55,0 Peat, th.t Coal, mln. t mln. Coal, 54 55,0 200 52 100 50 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 Years Liquid Fuels Coal, mln. t Peat, th.t (source: www.ukrstat.gov.ua) 3,5 1,4 1,3 3,1 3,2 3 2,8 3,3 3,3 2,9 1,2 Ukraine 3,0 1,2 1,2 2,6 2,4 2,5 1,1 1,1 1,1 1,1 1 1,0 mineral 2 0,9 0,8 1,5 0,6 mln.t figures. 1 0,4 Crude Oill, mln. t mln. Oill, Crude Gas Condensate, 0,5 0,2 Fuels 0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 Years Gaseous Fuels (source: www.ukrstat.gov.ua) Crude Oil, mln. t Gas Condensate, mln.t 21 1200 20,6 20,7 20,5 962 950 880 1000 832 867 20 745 744 20,1 20,2 19,8 800 19,9 721 19,5 19,6 658 600 19 Canada - Ukraine 19,2 mln.m3 400 18,5 18,6 Oil-Related Gas, Oil & Gas Natural Gas, bln.m3 18 200 Opportunities 17,5 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 Workshop, Kyiv Years February 25-26, Natural Gas, bln. m3 Oil-Related Gas, mln.m3 2013 11/25 200 600 180 500 160 Ukraine GDP and 140 Government Revenue (source: 400 120 www.economywatch.com) 100 300 Revenue, 80 UAH billion 200 Government GDP, USD billion 60 40 GDP 100 20 Government Revenue 0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 Years Ukraine GDP, Revenue mineral growing trends. Coal Growth & Peat Breaks flat-varying Oil-related Gas descending Crude Oil Canada - Ukraine Natural Gas Oil & Gas World Crisis Gas Condensate Opportunities Workshop, Kyiv 2004 2006 2008 2010 2012 February 25-26, 2013 12/25 2010 Total - $51.4 bln 28% iron ores iron ore concentrates iron casts oil & products 52% fertilizers non-organic chemicals 5% non-minerals 4% 7% 2% Ukraine 2% mineral sector export 2011 Total - $68.4 bln 27% iron ores iron ore concentrates iron casts oil & products 49% fertilizers Canada - Ukraine 6% non-organic chemicals non-minerals Oil & Gas 4% Opportunities 8% 3% 3% Workshop, Kyiv February 25-26, Source: www.ukrstat.gov.ua 2013 13/25 Ukraine: some country figures Country territory: 232 000 sq miles Population: 45 million • Annual gas statistics (2011): Gas consumption: 2.08 Tcf, including: Industry — 1.12 Tcf Public utilities — 0.96 Tcf Import from Russia — 1.35 Tcf Production in Ukraine — 0.73 Tcf Gas transit from Russia to Europe via Ukraine territory — 3.65 Tcf Canada - Ukraine Oil & Gas Opportunities Workshop, Kyiv, February 25-26, 2013 14/25 Ukraine: gas production • Domestic natural gas production — 721 Bcf /year • 676 Bcf — on-land production (in Ukraine) • 43 Bcf — offshore gas production in Black Sea (6%) • Offshore gas extraction facilities (Black Sea): • Two old offshore jackup rigs work in Black Sea operate for over 15 and 20 years • Two new jack-up rigs bought in 2012, one of them was put into operation on August 2012 (Naftogaz NJSC, Ukraine). LNG: first LNG importation Terminal is being on project feasibility stage. Canada - Ukraine Oil & Gas Opportunities Workshop, Kyiv, February 25-26, 2013 15/25 Ukraine: gas transportation and storage infrastructure High pressure pipelines - 23,600 miles Volume of natural underground gas storages — 1.12 Tcf Canada - Ukraine Oil & Gas Opportunities Workshop, Kyiv, February 25-26, 2013 16/25 3. Opportunities Canada - Ukraine Oil & Gas Opportunities Workshop, Kyiv, February 25-26, 2013 17/25 National Joint-Stock Company “Nadra Ukrayny”: the Hydrocarbon Vehicle of the State Geological and Subsurface Survey of Ukraine Cabinet of Ministers of Ukraine State Geological and Subsurface Survey of Ukraine NADRA UKRAYNY NJSC • Geological exploration; Other geological • License coordination; organizations • Cooperation with IOCs; • Oil and gas production. Canada - Ukraine Oil & Gas Opportunities Workshop, Kyiv, February 25-26, 2013 18/25 NADRA UKRAYNY NJSC: International activities Visiting and Participation in oil and gas international conferences and exhibitions (including World Shale Gas-2010, 2011 and 2012 (Dallas, Houston, TX, USA); Associate Member of American Gas Association (AGA) Drilling equipment market research and visiting of leading manufacturers of drilling rigs and equipment (USA, Canada, China); Cooperation with most of International Oil Companies for mutual activity in Ukraine (actual agreements and contacts with EXXON MOBIL, CHEVRON, SHELL, eni, PETROM, TOTAL, CNPC, PETROBRAS); Consulting, project management in geology exploration for foreign companies; Relations with World’s Leading companies engaged in offshore seismic exploration for their activity in Ukrainian sector of Black Sea (PGS, SGVeritas).