Czech oil and gas company MND is considering investing at least $60 million in three production sharing agreements (PSAs) operated by Ukrgasvydobuvannya, involving the development of Ukrainian hydrocarbon assets. The potential cooperation is expected to bring additional foreign capital, technologies and international expertise into Ukraine’s upstream sector.
MND and Naftogaz of Ukraine have signed a memorandum on potential cooperation and the Czech company’s participation in three existing PSAs. At this stage, however, the investment is not guaranteed: MND will be able to join the projects subject to the results of the relevant competitive selection process.
According to Naftogaz, the initial investment under the three PSAs could start from $60 million. The total amount of investment may subsequently depend on the results of exploration activities, production performance and further decisions by the project participants.
For Ukraine, the potential involvement of MND is significant primarily in terms of expanding private and international capital participation in the gas production sector. In addition to financing, the cooperation could provide access to technologies and expertise from an international oil and gas company, potentially helping accelerate the development of Ukraine’s hydrocarbon reserves.
The memorandum was signed on September 21 during the Carpathian Eight Summit. MND is part of the international investment group KKCG, owned by Czech entrepreneur Karel Komárek. The company is already active in Ukraine, where it conducts exploration and production at five oil and gas fields in partnership with the Zakhidnadraservice group of companies.
The potential new projects are linked to existing production sharing agreements between Ukrgasvydobuvannya and the Ukrainian state. In 2019, the government approved the results of tenders for nine oil and gas blocks. In particular, Ukrgasvydobuvannya, together with Canada’s Vermilion, was awarded the right to operate the Balakliiska and Ivanivska blocks, while Ukrgasvydobuvannya independently secured the Berestianska and Buzivska blocks.
