Naftogaz executive sees upbeat future for Ukraine’s oil and gas
While the current conflict with Russia may not inspire a great deal of optimism, the chairman of Naftogaz’s Supervisory Board says he can see better days ahead for Ukraine’s upstream sector, once the war comes to an end. Anthony Marino, a roughly 40-year veteran of the upstream industry, was elected chairman of the firm’s new Supervisory Board in February 2023. He is an American who has lived in Canada and is a former director, president and CEO of Vermilion Energy. During 2002 to 2020, Marino served on the supervisory boards and boards of directors of six companies and organizations.
Ukraine’s backbone of energy security. Marino spoke to the Executive Conference of the Global Energy Show in Calgary during Tuesday (June 10) and gave a thorough, candid assessment of Ukraine’s upstream sector. He described Naftogaz as the “backbone of Ukraine’s energy security.” The company has approximately 100,000 employees and is the country’s biggest gas producer, which, in turn, means Naftogaz is the largest energy holding company in Ukraine. Indeed, the firm contributed 8% of all tax revenues to the state budget in 2024.
Naftogaz’s role in numbers. Looking at additional data to describe Naftogaz’s outsized role in Ukraine’s energy picture, Marino said the company produces 81% of the country’s natural gas, but it also produces oil and is integrated in its operations for that commodity. Naftogaz handles 100% of Ukraine’s midstream activities and serves 12.5 million households with gas. Current output, said Marino, is 1.5 Bcfgd and 33,000 bopd. Together, they represent 300,000 boed. Also, the firm has 1.1 Tcf of gas storage.
Output and potential for additional reserves. “The largest producing areas are in the eastern and western ends of the country,” said Marino. “About 80% of all production is in the east, with the remaining 20% in the west, bordering the EU, and is a little more oil-prone. We support the population with subsidized gas. So, it’s an important company, not only for Ukraine and Europe, but the entire West.”
Marino maintained that Ukraine is an excellent place to invest for energy and will be particularly so, once the war with Russia ends. He believes this is true for both the upstream and downstream.
“Upstream, there are a number of good targets in the two basins (east and west),” explained Marino. “Naftogaz has achieved 5% gains in gas production each year during the war. Much of it is in conventional basins. This is very impressive and speaks well to the quality of the basins. Also, there are some shale formations available, as well as some opportunities in the Black Sea, similar to deepwater finds off Romania and Turkey.”
In summing up the situation and Naftogaz’s place in Ukraine, Marino said, “so, there are lots of opportunities for additional finds and production, as well as future exports. I do think that there’s a great opportunity for Western companies after the war ends.”
