2023-06-17 06:45:34
The aim is to ensure that the oil stays in the country, rather than exporting it. The project is expected to cost US$1 billion in investment per year, he said. Ukrnafta has already secured around US$250 million, but needs partners to make up the difference.
A more urgent objective since the start of the war
Denys Kudin presents this project as an opportunity to enter a promising oil market while helping Ukraine achieve energy independence, a long-standing goal that has become more urgent because of the war once morest Russia.
At the start of the war, Ukraine imported most of its oil from Russia, Belarus and Poland. Since the beginning of the war, the country has struggled to find new supply chains and its customers are paying the price.
The years-long conflict in the Donbas region has also sharply reduced the production and transport of coal in Ukraine, another product for which the country’s economy depends on exports.
Risks and obstacles
Philippe Le Billon, a professor in the School of Public Policy and Global Affairs at the University of British Columbia (UBC), points out that while development is happening in the west and northeast of the country, outside the current conflict zone, there is always the possibility of oil installations becoming the target of drones and missiles.
The professor says there is also a public relations risk. Some investors might feel they are fueling the war or unfairly profiting from the conflict, he notes.
For potential investors, obtaining financing and insurance might also be a hurdle. As of January, Export Development Canada (EDC) no longer provides new direct financing to the international fossil fuel sector.
The move is in line with the federal government’s goal of achieving its zero emissions goal by 2050.
« Certainly, climate change concerns add an additional barrier to attracting foreign direct investment in oil and gas to Ukraine. »
Denys Kudin remains optimistic. He believes that upgrading Ukraine’s oilfields would help reduce carbon emissions from oil and gas production.
He hopes thatEDC will consider granting an exemption to companies wishing to take out risk insurance for projects in Ukraine, given the current political situation.
With information from Paula Duhatschek
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