The history of the Ukrainian oil and gas industry

Evidence of the presence of oil in Crimean peninsula and Ukrainian Carpathians, dates back to antiquity.

The industrial oil recovery began in the 18th century and in 1909, 2 million tons of oil were extracted in the Pre – Carpathian area. The gas industry originates from putting intro operation of the Dashava gas field and building of first gas pipeline Dashava - Stryi in 1924. Intensive development of the gas and petroleum industry is connected with discovery of considerable stocks of oil and gas in region Dniprovsko - Donetsk basin, Pre - Carpathian and Black Sea - Crimean regions during the post-war period. Oil production reached maximum output levels in 1972, when 14.4 million tons were produced. Similarly, domestic gas production peaked at 68.7 billion cubic meters in 1975.

Oil and gas in Ukraine

Priority energy resource in Ukraine is the natural gas which particle in structure of consumption of primary energy resources makes up 41 %.

Ukraine belongs to the countries with deficiency of own natural hydro carbonic resources: domestically produced gas fulfills only 20 – 25% of total gas demand, while Ukrainian oil production meets only 10 to 12% of oil requirement.

The oil and gas share in the general balance of use of primary energy resources of Ukraine makes up 59.4 %.

In 1991 gas consumption made up 118.1 billion cubic meters and the country occupied 3rd place in the world after the USA and Russia. For the last 15 years natural gas consumption in Ukraine has decreased and in 2007 it has made up 73.4 billion cubic meters. Consumption of oil and petroleum product in Ukraine for the last years has decreased from 29 to 25 million tons.

Extraction of natural gas in the country had been declining over a long period; in 1997-2000 it was stabilized at level of 18 billion cubic meters for a year, and for the last four years increase in gas production has been observed, which made up 20.7 billion cubic meters in 2007. Growth of extraction volume was possible by introduction of actions for increase of efficiency of industrial and resource bases, and development of new fields. The oil and condensate recovery in Ukraine was growing throughout 1998-2007 and made up 3.7-4.5 million tons per year.

Extraction growth was reached by drilling of new oil wells, effective utilization of operating fund of wells, introduction of secondary and tertiary oil and condensate recovery methods.