Embracing Investment Opportunities For A New Energy Future

Interview with David Martinon, CEO, Expert Petroleum

For Ukraine to realise its upstream potential and given ambitious Government growth plans, urgent modernisation of its oil and gas assets is a necessity. Having signed Ukraine’s first ever full-scale Production Enhancement Contract (PEC) to enhance 13 depleted gas fields in Western Ukraine, what does Expert Petroleum bring to the table in terms of local knowledge and international expertise?

Expert Petroleum, and more broadly the Production Enhancement Contract (PEC) model, has, I believe, already strongly demonstrated in the last 10 months what it can bring to support Naftogaz and the government’s ambitious plans to realise Ukraine’s upstream goals: operational excellence culture, environmental footprint reduction and production and reserves increase are already noticeable on the fields under the PEC.

Expert Petroleum brings to the table more than 20 years of expertise and successful experience in managing PECs in the Eastern European region in order to make mature oil and gas fields safer, greener and more productive by applying fit for purpose technologies and new production enhancement techniques.

Last but not least, all of this is only possible by fully engaging the local Ukrainian workforce operating the fields and we have spent a lot time listening to and gathering the local personnel needs and knowledge. For example, we have put in place a programme to take into account and value their initiatives to enhance the operations, their working environment and health and safety in general.

Having signed the Production Enhancement Contract in April 2020, can you tell us, during the first year, how has your progress been? Is output increasing and are you seeing results as anticipated?

Since the contract was signed April 2020, in less than 6 months, despite the very challenging logistical conditions due to COVID-19 restrictions, we have mobilised the PEC and smoothly taken over the personnel, logistics and operations in the 13 fields of the contract with great support and in full cooperation with LGV (the local UGV operational entity).

After around 4MUSD of investment in the fields, we have increased in 10 months the production by 13% and have refined our future investment plan over the next 4 years to further increase the production and reserves and also improve our environmental footprint by reducing the methane and GHG emissions of our operations.

Being a partner of choice for Naftogaz, do you see potential in extending the PEC partnership beyond its 15-year term? Where do you see further immediate opportunities for Expert Petroleum in terms of investments and deploying the latest digital technologies?

We do see a lot of potential not only to extend the PEC partnership in time, beyond its 15-years term, but more importantly to have a greater impact in the near future to expand it to more fields in Ukraine.

We have already brought and implemented a lot of new technologies to Ukraine such as performing the first foam hydraulic fracturing in Ukraine (jointly with Tacrom).

We are modernising and bringing real time monitoring of the production facilities by implementing a new production data management (jointly with Schlumberger) that we are integrating with new remote well parameters monitoring systems, automatic wellhead injection systems and an upgrade of the metering systems to improve the accuracy of measurements for better operational control and field development planning.

From an operational excellence point of view, we are paying a lot of attention to driving and vehicles - which is the most-risky part of the operation (GPS systems installed on the company vehicles, regular technical inspections, training for our drivers etc).  Also, we are planning to build a facility for testing our safety valves which significantly improves our systems reliability and allows us to perform regular and unscheduled checks on equipment.

We will continue in the next few years with geological data acquisition (3D seismic, logging, pressure mapping) and analysis to update integrated reservoir models. We have new wells planned in 2022 and beyond.

We will also continue with our surface facilities upgrade for flow optimisation, debottlenecking and compression improvements to maximise production and methane emissions reduction.

You will be joining us this October for the first Ukraine Gas Investment Congress taking place from 20-22 in Kiyv. Can you tell us, in your opinion, how important is the Congress going to be in terms of showcasing to the world the opportunities now available to invest in and partner with Ukraine to modernise and develop its oil and gas fields and infrastructure?

Our participation within the Investment Congress is extremely important because Ukraine Upstream potential is very high, and it is important we share our feedback on our partnership and our experiences with Naftogaz E&P.  

We have found it to be, without any doubt, of the highest international standard from a transparency, openness, trustfulness, reliability and fairness point of view. This has applied all the way from the beginning of the prequalification, the bidding process, the contract negotiation, the award, the mobilisation and up to the on-going (more than 10 months of operations now) contract execution and management.

This extends also to invoice payments which are executed on time. Furthermore, Naftogaz personnel from all the different departments that we deal with have always been fully engaged team players to ensure the partnership succeeds.

By joining the Ukraine Gas Investment Congress, we can share our first-hand experiences and encourage more international partners to come to the Ukraine.