Ukraine producers seek to avoid coronavirus laws

Ukraine's oil and gas producer association, AGPU, has urged the government to exempt producers from certain coronavirus restrictions.

Ukraine's cabinet yesterday introduced 30-day emergency measures and extended a nationwide quarantine until 24 April. These measures are not expected to reduce gas production. But any tightening of restrictions could force output-related activities to halt, unless firms are exempted.

Local authorities have started to draft critical infrastructure lists in anticipation of a possible heightened response, AGPU said. Not including gas producers on these could interrupt supply and reduce tax payments, it added.

A source at one producer said it would be impossible to return to previous output levels if the government obliged firms to halt offtake. The source said their firm had already imposed altered shift patterns at production facilities to reduce the risk of infection, and that these have not yet affected output. Ceasing production would also increase the risk of technical problems and environmental damage, the source said.

Ukrainian production is among the highest in Europe, relative to demand. It is concentrated in four provinces, which as of yesterday had reported a combined eight confirmed cases of coronavirus, out of 113 nationally.

Any curtailments to offtake could increase Ukraine's need for imports compared with recent years, although there would also be scope for the stockbuild to slow in coming months, especially as inventories are well above recent-year averages.

By Victoria Dovgal and Paul Martin

Offtake exceeds summer demand mn m³/d