Ukraine boosts number of operational drilling rigs in Q1 in gas push: AGPU

Ukrainian upstream companies increased their drilling activity in the first quarter of 2024, with an average of 46 rigs operating in Ukraine in the period, higher than pre-war levels, industry group AGPU said May 13.

In a statement, AGPU said the number of operational rigs in Q1 was well up on the pre-war average of 30 and also higher compared with Q1 2023 when 37 rigs were operating.

Ukraine has made it a priority in 2024 to further increase domestic gas production to eliminate the need for costly European imports.

AGPU executive director Artem Petrenko said the increase in drilling activity demonstrated the sector's efforts to maximize gas output despite the Russian invasion.

"State and private companies are doing everything possible to provide Ukraine with its own gas," Petrenko said.

AGPU, citing Baker Hughes statistics, said that in Europe as a whole there were 118 rigs in operation, meaning 40% of the total were located in Ukraine.

Total output

Total Ukrainian gas production rose to 18.7 Bcm in 2023, up from 18.5 Bcm in 2022, with UkrGazVydobuvannya, the upstream arm of Ukraine's state-owned Naftogaz, leading efforts to raise domestic output.

UGV increased gas production further in the first quarter of 2024, with output up by 12% compared with the same period last year.

Naftogaz said last month that UGV had brought online five "highly productive" gas wells since the start of 2024, with CEO Oleksiy Chernyshov saying output rose also as a result of "effective" work at older fields.

"Our goal is to maintain this trend and to achieve an increase in production also based on the results of the year," Chernyshov said.

UGV already boosted daily gas output to a more than five-year high in February, with production topping 38.5 million cu m/d, the highest level since December 2018.

Naftogaz said in April that production rates were traditionally highest in the east of the country, but that output in the west and central regions also exceeded expectations.

Gas price

Ukraine has long held the ambition of producing all the gas it consumes to eliminate imports from Europe, and said imports were not needed in the past winter.

Halting the need for imports to meet its own demand is a key priority for Ukraine, not least given the relatively high price of imported gas.

Platts, part of S&P Global Commodity Insights, assessed the benchmark Dutch TTF month-ahead price on May 13 at Eur29.53/MWh.

Total Ukrainian gas consumption increased to 19.8 Bcm in 2023, up from 19.3 Bcm in 2022, as demand rose amid a recovery in industrial activity.