Business Areas

CJSC UKRGAZ-ENERGO is one of leading companies in Ukrainian oil and gas sector. The Company was founded by implementation of the arrangements between NJSC Naftogaz Ukrainy and JSC Gazprom to manage the crisis with natural gas supply to Ukraine occurred between Ukraine and the Russian Federation at the end of 2005 - beginning of 2006. Formation of a joint venture with the participation of Ukraine's internal energy market operator and the importer of natural gas stabilized the situation with natural gas import in Ukraine, strengthened the energy balance of the country, and facilitated substantial depolitization of relations between Kyiv and Moscow in the area of supply and transit of energy carriers. Such approach, in turn, demonstrated Europe-wide trend that a supplier of energy carriers is committed to being granted access to ultimate consumers in exchange for solid guarantees of uninterrupted supply of the stipulated amount of resources to the consumers under mutually acceptable terms.

Objectives of the new Company were specified as follows:

• delivery and production of natural gas in the amount required to provide gas balance of Ukraine, management of natural gas storage to compensate seasonal effects on its consumption, supply and production of other energy carriers;
• sales of natural gas and other energy carriers to Ukrainian customers at transparent market prices, modernization of Ukraine's energy markets in compliance with European standards;
• investment business in fuel and energy complex.

Since the beginning of operations until this time CJSC UKRGAZ-ENERGO provides to Ukrainian customers an opportunity to buy natural gas at the best price among the countries in the region (Eastern Europe, CIS). At the same time, the Company maintains market approach to pricing formula and puts in practice the method of supply generally accepted in Western countries.

That being said, recognizing high social responsibility throughout the period of operations in the market, CJSC UKRGAZ-ENERGO has been selling natural gas to customers at a price of, lower than specified by the National Electricity Regulation Commission and the Government. As a result, strong adverse effect on Ukrainian economy forecast by some experts due to growth in worldwide prices for energy carriers was avoided. (Knowingly, growth in Ukraine's GDP in 2006 amounted to 7.1%.) Ukraine was provided with time allowance for gradual transition to worldwide prices for natural gas, comprehensive modernization of the national fuel and energy complex, extensive implementation of energy saving technologies.

More details on CJSC UKRGAZ-ENERGO operations in natural gas supply market are provided in Gas Supply section of this site.

In October 2006, upon consultation with the Government of Ukraine, which cares to maintain acceptable domestic prices for fuels and mitigation of their volatilities, CJSC UKRGAZ-ENERGO started operating in oil products market (purchase and processing of Russian and Ukrainian oil, sales of oil products to Ukrainian customers). In this area, CJSC UKRGAZ-ENERGO co-operates with such companies as Rosneft, Ukrnafta and Surgutneftegaz. Oil processing is provided by Kremenchuk Oil Refinery.

Near-Term Priorities of the Company:

- Maintenance of high level of customer services based on transparent and uninterrupted methods for supply of natural gas and oil products;

- Maintenance of high payment discipline in settlement with suppliers of natural gas, in settlement with the customers, in the area of tax withholdings;

- Augmentation of natural gas reserves in the underground gas storage facilities in a view to compensating natural volatilities of its consumption;

- Expansion of business by acquisition of assets in the area of natural gas and oil production;

- Construction of own oil products sales system;

- Participation in investment projects for construction of gas storage facilities and electric power generation.