In 2022, Ukraine reduced gas production by 6% - to 18.5 billion cubic meters

In 2022, Ukraine produced about 18.5 billion cubic meters of natural gas, according to preliminary calculations by ExPro. Compared to last year, gas production decreased by 6% - from 19.8 to 18.5 billion cubic meters. Note that this is the lowest production value in the last 20 years.

The main reason for the reduction in production is the full-scale war that Russia started in Ukraine at the end of February 2022. The occupation of part of the territory of Ukraine (especially the Kharkiv region) negatively affected gas production in these regions and near-front zones.

JSC "Ukrgazvydobuvannya" (UGV) remains the largest gas production company in the country. During the year, the company produced 13.2 billion cubic meters of gas, 3% less than last year. As reported, commercial gas production of UGV amounted to 12.5 billion cubic meters.

In 2022, PJSC "Ukrnafta" reduced natural gas production by 7% - to 1 billion cubic meters. Changes in the structure of the company's shares, as well as a change in management, certainly had their impact, but the main reason for the reduction in production is old fields and practically no investment in gas production

According to the results of the year, private companies showed the biggest drop - to 4.3 billion cubic meters, 15% less than last year. A noticeable drop in production by private companies is due to a number of reasons, the main of which is the war.

In connection with the war, the consumption of natural gas in the country fell significantly, in some months it almost doubled compared to last year. The sales market for private companies has narrowed considerably, and the export of domestically produced gas remains prohibited. Taking this into account, companies accumulated reserves in underground storages - more than 1.2 billion cubic meters of gas at the beginning of December.

In addition, from March to August, the rent for natural gas production in Ukraine was tied to prices in European hubs, where gas was traded many times more expensive. Against the background of a sharp drop in income, as well as difficulties with the sale of gas, private mining companies have practically stopped investing in gas production.

At the same time, since August, the basis for calculating rent was linked to prices on the domestic market, which allowed companies to stabilize the situation. It is expected that the companies will be able to increase gas production next year, although problems with its implementation still remain.