Ukrnafta

Ukrnafta is a large company producing over 90% of oil and almost 17% of gas in Ukraine. The company is in the center of the long-lasting corporate conflict between two groups of the majority shareholders – the state and Privat group,
while the latter exercises direct control over the company now. In addition to the
upstream divisions, Ukrnafta also owns a large retail network of petrol stations – over 500.

This January-October Ukrnafta cut its oil production as compared with the similar period last year by 4%, a decline in gas production for the same period amounted to 3.2%. The financials of the company for three quarters in 2008 in relative
terms have improved: sales boosted 92%, earnings before interest, taxes and
amortization – 44%, and its net profit soared by over 120%.

Naturally, the oil prices decline worldwide and affect the Ukrnafta financials, which in addition to hydrocarbon production, also retails the products of their refinery. However, after the rental payments for oil and gas condensate production were pegged to the oil price on exchange, Ukrnafta benefitted from lowering of fiscal load on the company.