Naftogaz Seeks Funds for Coalbed Methane Development through IPO

Ukraine's state-owned oil and gas firm Naftogaz is seeking to raise between $5 billion and $6 billion through an initial public offering (IPO) of its stock on the international market in 2012-2013, Ukraine's Minister of Fuel and Energy of Ukraine Yuriy Boyko announced this week.

The decision came as a result of a meeting of the Committee on Economic Reforms on March 21, headed by the President Viktor Yanukovych. Consultations are underway to determine which stock exchange would be the most profitable for Naftogaz to offer the IPO. "The money will be allocated toward the company development, domestic gas production increase and domestic gas transit system modernization," Boyko said.

Yanukovych said the IPO was necessary to ensure reliable gas and oil refining products' supply for the Ukraine.

Currently, work is underway to establish a joint Gazprom and Naftogaz enterprise for coal-bed methane production. Naftogaz also is a strategic partner of Russian Gazprom. Around 70 percent of Russian gas - 94.6 billion cubic meters in 2010 - was transited through Ukraine to Europe.

NJSC Naftogaz is engaged in oil and gas exploration and production, and also supplies gas to Ukrainian consumers.

According to the company's website, the Ukraine has substantial proven reserves and potential resources of oil and natural gas. The potential resources of natural gas amounts 5,4 trillion cm, gas condensate - more than 400 million tons, oil - 850 million tons.