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CEO of JKX presented key factors of PPC production growth and conditions for the further development of the industry

Victor Gladun, CEO of JKX and JV PPC presented key factors of a production increase in 2018-2019

Kyiv, October 9, 2019 – Victor Gladun, CEO of JKX Group and CEO of JV PPC, spoke at the fifth Ukrainian Gas Forum.

The main purpose of this event was to discuss the most urgent problems and to develop proposals for necessary reforms in the gas sector of Ukraine. The Forum was attended by representatives of government, business, and the expert community.

Viktor Gladun spoke in a panel devoted to issues of energy independence and an increase of production. During the period 2018 – 2019 the JV Poltava Petroleum Company has shown a trend towards the growth of hydrocarbon production. In his presentation, the CEO of PPC explained in detail the factors that led to such results.

JV PPC worked in three main directions. The first was securing access to third-parties wells (belonging to the fund of state-owned companies), which are located on PPC licenses.

“First of all, we have thoroughly studied the wells’ fund under our licenses, which belong to the fund of state-owned companies. These are over 90 wells owned by PJSC Ukrgazvydobuvannya, NJSC Nadra Ukrainy, and PJSC Ukrnafta. We launched a pilot project with NJSC Nadra Ukrainy, and then applied to UGV and Ukrnafta, leased wells, repaired and received production,”- said CEO of JV PPC, Victor Gladun.

This principle of cooperation is mutually beneficial: PPC invests in workovers, manages the process, pays taxes and royalty rent. The well’s owner does not incur costs but receives additional income. As a result, the company restored 15 wells of state-owned enterprises.

The second direction was the revision and implementation of the well workover program and production enhancement of its own wells.

The JV PPC specialists have thoroughly researched their own fund and developed a program of production enhancement. As a result of this program, PPC recovered 17 wells from its own wells’ fund and drilled three sidetracks.

The third direction was the renewal of the new wells drilling program. In 2018, PPC drilled the first well in the Elizavetivske field, performed 3D seismic and data interpretation. During the period 2018-2019, PPC successfully completed drilling 4 new wells.

As a result of the work, in 2018, the increase in production was 5%, and for the 9 months of 2019 PPC increased production of all hydrocarbons by 51%.

The main factor for the further development of the industry is to ensure the stability of the fiscal system: “The state guaranteed the fixed rates of 12% and 6% for the next 5 years. It is important not to change the rules for investing in drilling”, – said Victor Gladun.

In addition, in order to create favorable conditions for investment in the industry, it is necessary to ensure quality preparation of auctions block, disclosure of geological information, conditions for cooperation with state-owned companies and further deregulation of the industry.