Smart Energy Group is forced to stop the implementation of development programs totaling UAH 3.2 billion. 


These are investments in Ukrainian subsoil, which were planned for 2025 and included drilling new wells, construction and modernization of production facilities. Due to the suspension of special permits for hydrocarbon production and, as a result, the blocking of the work of the group's companies, further implementation of the group's production program is not possible. 

Currently, two companies of the group (Representative Office of Regal Petroleum Corporation Limited in Poltava region and Prom-Enerho Product in Kharkiv region) are in forced downtime. The validity of three special permits for hydrocarbon production held by the group's companies was suspended on November 15, 2024, by order of the State Geological Survey of Ukraine in implementation of the NSDC Decision on the application of sanctions against the group's current beneficiaries - EU citizens, Cypriot trustees. 

Over the 10 years since its establishment, in 2011-2021, the capital investments of the gas production group Smart Energy in Ukrainian subsoil amounted to UAH 5 billion. At the same time, in 2021, on the eve of a full-scale invasion, the group made another leap, increasing investments 3 times to UAH 1.5 billion. The bulk of these funds were geared at drilling new wells to increase Ukrainian gas production. The rest - at modernization of equipment of the group's enterprises. These investments allowed the group to produce 2.8 billion cubic meters of natural gas and 243 thousand tons of condensate over 10 years. Later, in the face of Russian military aggression, Smart Energy continued to develop Ukrainian subsoil.

In 2022-2024, UAH 2.3 billion was invested in development projects. These are funds that the group reinvests from its own revenues each year. But currently, all further development programs are blocked.

“The full-scale war has made adjustments to our production programs on some time, for safety reasons, primarily for our employees, we have suspended some projects. But it soon became clear that we would have to continue working in these difficult conditions, because the country needs the gas that we produce. And the stability of energy system depends on sustainable operation of extracting companies and increase in gas production volumes. But we did not expect that the work of gas producing enterprises could be completely paralyzed in such conditions,” commented the situation Oleksiy Zayets, Acting General Director of Smart Energy Group. 

Recall that for almost 1.5 years (April 2023 - June 2024), the validity of special permits for subsoil use belonging to Smart Energy Group was suspended due to NSDC Decision on application of sanctions against the former beneficiary of the group. During this time, the state lost 195 million cubic meters of gas and UAH 1.65 billion in tax revenues. Later, state authorities, understanding the importance of gas production industry for the country, recognized the need to unblock the work of the companies and a corrective decision was made by the National Security and Defense Council. Thanks to the titanic work of the Smart Energy group team, hydrocarbon production was restored within a month, but due to the long downtime of the wells, almost 50% of productivity was lost. Later, in October 2024, the state again imposed sanctions, this time against the current beneficial owners, without assessing the consequences of the losses for the country's subsoil and economy, as a result of which the group's companies were again forced to stop their activities. 

Reference 
Smart Energy Group is a part of the Smart Holding investment group and implements projects for exploration and industrial development of hydrocarbon fields. Before the start of the Russian military aggression, the group was among the five largest private gas producers in Ukraine, producing a total of over 1 million m³ of gas per day. The oil and gas sector of Smart Energy is represented by public British company Enwell Energy and Kharkiv company Ukrgazvydobutok PJSC . In turn, Enwell Energy's assets operate in Poltava region - these are Representative Office of Regal Petroleum Corporation Limited and Arkona Gas-Energy LLC, as well as in Kharkiv region - Prom-Enerho Product LLC.