INTERVIEW: Czech energy group MND stresses need for domestic gas output

Investment in domestic gas production is "essential" to strengthen energy security in the Central and Eastern European region, with gas set to remain a key fuel through the 2040s, the head of Czech energy group MND said.

In an interview, MND Group CEO Jiri Jecmen said the suspension of Russian gas flows via Ukraine had "significantly" impacted the region and disrupted the global balance and prices more generally.

"As a result, Europe now relies heavily on LNG and Norway," Jecmen said. "To maintain the competitiveness of EU economies, reduce this reliance, and strengthen overall energy security, investing in domestic gas production is essential," he said.

"For the next 20-plus years, it's hard to see the importance of gas as a fuel diminish. Increasing domestic production will stabilize -- and lower -- prices and reduce the impact of LNG market volatility caused by global events," he said.

Russian gas flows via Ukraine were suspended Jan. 1 following the expiry of the five-year Russia-Ukraine gas transit agreement and Kyiv's refusal to make any new arrangements to allow for continued flows.

Some 15 Bcm/year of gas supply -- predominantly delivered to Slovakia, Austria, Moldova and Italy -- was lost as a result.

MND has upstream assets across the CEE region, including in Czechia, Ukraine and Austria, and a robust exploration program to identify new resources.

"This emphasis on exploration is coupled with optimizing gas field recovery via precise reservoir engineering to maximize efficiency," Jecmen said.

MND is also seeking new licenses and partnerships with upstream companies that own exploration areas with the potential for new discoveries.

"MND also intends to enter new markets with gas production potential," Jecmen said, adding that it was seeking opportunities in regions with developed infrastructure and well-established rule of law, including in the North Sea.

EU role

Jecmen also said the EU needed to change its approach to gas buying.

"Europe needs to re-position itself to choose the most efficient -- and cost-efficient -- avenues to meet internal demand, rather than being forced to take whatever opportunities arise," he said.

"In simple terms, the EU must shift from being a passive price taker to an active, strategic market player that selects the best opportunities."

Jecmen also raised concerns about the EU's new regulation on methane emissions in the energy sector.

He said the regulation could have a "major impact" on small and depleting hydrocarbon sources.

"In some cases, this change to the regulatory framework -- even if well-intended -- will cause undesirable premature closures by rendering these economically unviable. Regulatory exceptions should be drafted to allow continued production," he said.

The EU has also repeatedly stressed the need for more investment in renewables as part of a move away from fossil fuels.

Jecmen said MND did not view increasing domestic upstream activity and prioritizing renewables as mutually exclusive. "On the contrary, there are strong, natural synergies between the two," he said.

"By developing domestic upstream assets -- particularly gas -- MND can help ensure a reliable energy supply as renewables continue to grow," he said.

In 2024, MND also became an electricity producer through the construction of a gas-fired power plant directly at one of its producing wells.

"This technology will be replicated at other wells in Czechia and potentially in Ukraine, where domestic power production is critically needed. This type of investment highlights MND's approach to organic growth," Jecmen said.

Upstream experience

He said technical expertise, project management skills, and the innovative approach required for oil and gas exploration and production can be transferred to renewable energy projects.

"For example, experience gained in drilling or geophysical surveys is often directly applicable to geothermal projects and other emerging technologies."

Jecmen also said that increasing domestic upstream activity reduced reliance on imported resources that often come with higher transportation emissions.

He added that revenues generated from hydrocarbon production can be reinvested into research and development, and the scaling of renewables.

"As renewable capacity expands, a stable foundation from domestic sources contributes to a smoother, more resilient energy transition," he said.

"In short, MND believes that domestic upstream development can facilitate rather than hinder the transition towards renewables."

MND has also been involved in renewable energy sources for many years, including photovoltaics, wind power, and geothermal wells.

It is also currently developing multiple battery storage facilities, mainly in Czechia and Germany.

And while MND is involved in green hydrogen projects and is one of the first producers in Czechia, Jecmen said the purely business-based demand for green gas is quite limited compared to the demand for natural gas.

"The development of the green gas industry is -- and very likely will continue to be -- underperforming hopes and expectations," Jecmen said.