The “effective” manager of the state-owned JSC Ukrgasvydobuvannya (UGV) Maxim Gorbatyuk continues to manage the company’s fuel direction. But here’s the problem: the result of this is not the growth of the company’s income, which is the main task of the commercial director, but its decline. Let's look at just one example.
Starting from September 2023, there was a significant increase in condensate production at the company Ukrgasvydobuvannya JSC due to the introduction into pilot development of two new gas condensate fields in the Kharkov region. It would seem great - you can sell raw materials on the open market and earn a lot of money. Or better yet, process the condensate into fuel and sell it at your own gas stations. But it's not that simple.
Back in February 2022, the Shebelinsky plant, capable of processing up to 500 thousand tons of condensate per year, was stopped, so Ukrgasvydobuvannya sells gas condensate from its own production through electronic exchange trading on TV “Ukrainian Energy Exchange”, including sales from new fields .
Of course, the Shebelinsky plant can be put into operation under certain conditions, then, accordingly, all the gas condensate would go for processing, and through the TV “Ukrainian Energy Exchange” it would be possible to sell the plant’s commercial products. Also, we would provide ourselves with diesel fuel of our own production. This had a positive impact on the financial performance of Ukrgasvydobuvannya JSC, and, accordingly, on the company’s profit. But, unfortunately, the managers of the state company Ukrgasvydobuvannya JSC, who are responsible for this area, decided not to launch the plants and blame everything on the war. The option “products in the evening and condensation in the morning” suits them better. It is this solution that allows managers to sell gas condensate at the Ukrainian Energy Exchange and purchase fuel for their own needs from other producers.
And while the managers of Ukrgasvydobuvannya JSC have been building the methanol plant since 2016, the Shebelinsky plant has been stopped since February 2022. It can be assumed that, in addition to objective reasons, the director for commercial issues, Maxim Gorbatyuk, who was appointed by the head of NJSC Naftogaz of Ukraine Alexey Chernyshev, may be interested in the plant’s downtime. Gorbatyuk himself tells the UGD that he is Chernyshev’s man and allegedly has some kind of privileged status.
Due to the introduction of martial law in Ukraine from February 24, 2022, until the end of martial law, exchange (auction) bulletins and weighted average price bulletins are not available for viewing on the website, and information regarding these trades can be found in the trading system.
It is possible to study gas condensate sales data of JSC Ukrgasvydobuvannya on the website of the Ukrainian Energy Exchange TB. Since September 2023, there has been a significant increase in condensate, so we analyzed data on the sale of gas condensate from new fields during September-December 2023. Accordingly, comparable weighted average prices for raw materials from Ukrgasvydobuvannya JSC and the Private Company for the same sales dates.
The positions of D. TRADING LLC and Ukrgazdobycha JSC (OGC-UGV-23 and up to 39) were presented for electronic exchange trading during September-December 2023 together (on one trading day).
During September-December 2023, Ukrgasvydobuvannya JSC took part in 17 electronic exchange trading and sold gas condensate extracted from new fields in the amount of 26.1 thousand tons, the weighted average price for raw materials was 38,578.23 UAH/t.
LLC "D. TRADING" on the same dates as JSC "Ukrgazdobycha" (17 electronic exchange trading), sold gas condensate in the amount of 10.9 thousand tons, the weighted average price for raw materials amounted to 39,687.41 UAH/t. Consequently, the private company sold gas condensate at 2.79% more expensive than the state-owned JSC Ukrgasvydobuvannya.
As a percentage, this difference does not look significant, and few will pay attention to it. But if we convert it into hryvnia, the difference looks much more attractive, namely 29 million UAH for September-December 2023 for 26.1 thousand tons of gas condensate, that is, a little more than a million per thousand tons.
Further, it is even more interesting: at all seventeen electronic exchange auctions, Ukrgasvydobuvannya JSC sold gas condensate at a weighted average price cheaper than D. TRADING LLC.
Of course, there are dates of electronic exchange trading, where the weighted average price of Ukrgasvydobuvannya JSC was significantly less than D. TRADING LLC. For example, let’s compare electronic exchange trading OGC-UGV-26 of Ukrgasvydobuvannya JSC on September 26, 2023 and D. TRADING LLC:
JSC "Ukrgasvydobuvannya" 09/26/2023:
- extracted condensate from new fields was sold in the amount of 900 tons;
- the price per ton of condensate was UAH 37,850.92;
- condensate sold for a total amount of UAH 34,065,828.00.
LLC "D. TRADING" 09/26/2023:
- produced condensate sold in the amount of 300 tons;
- the weighted average price per ton of condensate was UAH 48,671.66;
- the minimum price per ton of condensate was UAH 47,505.71.
- condensate sold for a total amount of UAH 14,601,499.25.
As a percentage, the difference in price already looks significant, namely 20.3%. The private company sold condensate at a higher price than the state-owned JSC Ukrgasvydobuvannya. If we convert to hryvnia, then the difference is 8.7 (at a price of 47,505.71 UAH) - 9.7 million UAH (at a price of 48,671.66 UAH). Note that according to the Ukrainian Energy Exchange, the average price for gas condensate on September 26, 2023 was 39,473 hryvnia.
It should be noted that UGD produces more than 352 thousand tons of condensate during the year. Above, only the sale of condensate from new fields in the amount of 26.1 thousand tons (about 7.4% of total production) is considered. UkrGasVydobuvannya sells more than 50% of the produced condensate through electronic exchange trading; accordingly, even at a reduced price of “only” 2.79%, the amount of lost profit from the sale of UGD gas condensate based on the results of 2023 may exceed UAH 135 million. I wonder what law enforcement agencies think about this? After all, this is one of the schemes that we examined according to open data. It can be assumed that the damage from the activities of UGD top management may be greater.
The “efficiency” of Maxim Gorbatyuk as director of commercial affairs is confirmed by state statistics, where among the TOP-10 companies by revenue, Ukrgazvydobuvannya JSC with the largest case in the oil and gas complex occupies 7th place, having passed ahead to 6th place by PJSC Ukrnafta. D.Trading LLC is on 2nd place in the ranking!
Logical questions arise for Gorbatyuk:
Why don’t the managers of Ukrgasvydobuvannya JSC launch the Shebelinsky plant for processing the extracted condensate? Perhaps the “margin” on the reduced price is more interesting to them personally than the company’s profit?
Why don’t they process all the gas condensate produced by the company at the Shebelinsky plant and get diesel fuel itself? Perhaps the “margin” on the purchase of diesel fuel is more interesting to them personally than the company’s income?
Of course, the managers of Ukrgazvydobuvannya can make seemingly reasonable arguments - the front line is not far, there are risks for workers, the plant is damaged and there is no point in rebuilding with the risk of new attacks. But then a counterargument can be made - 2 years of full-scale war have already passed and top managers must, in the new conditions, reorient themselves and restart the process, which will reduce the risks of losing the plant and will make it possible to more effectively protect it and process products that are necessary for both the company and the Armed Forces of Ukraine. However, the career achievements of the aforementioned Maxim Gorbatyuk suggest that one cannot expect effective decisions from the commercial director of the UGO.
Moreover, it is obvious that the results of Gorbatyuk’s activities also cast a shadow on the one who actually appointed him to the position in the State Administration. Alexey Chernyshev cannot be unaware of the real state of affairs in Ukrgazvydobuvannya, since last month a meeting of the board of Naftogaz was held, at which, among other things, they heard a report from Ukrgazvydobuvannya managers for 2023. If Chernyshev plans to build a future career in the Government, as they say, then ineffective managers should definitely be gotten rid of as quickly as possible.
