In 2022, Ukraine produced about 18.5 bcm of natural gas, according to preliminary calculations by ExPro. Compared to last year, gas production decreased by 6% - from 19.8 to 18.5 bcm. Note that this is the lowest production level 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 Ukrainian territory (especially the Kharkiv region) negatively affected gas production in these regions and near-front zones.
Ukrgazvydobuvannya JSC (UGV) remains the largest gas production company in the country. During the year, the company produced 13.2 bcm of gas, 3% less than last year. As reported, commercial gas production of UGV amounted to 12.5 bcm.
In 2022, Ukrnafta PJSC reduced natural gas production by 7% - to 1 bcm. 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 bcm, 15% less than last year. A noticeable drop in production by private companies is due to several 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 halved compared to last year. The sales market for private companies has narrowed considerably, and the export of domestically produced gas remains prohibited. Considering this, companies accumulated reserves in underground storages - more than 1.2 bcm 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. Amid a sharp drop in income, as well as difficulties with the sale of gas, private production 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 sales remain.
