Hydrocarbons extraction in Ukraine steadily declines during last 20 years. After new significant hydrocarbon reserves were discovered in the Dnieper-Donetsk Basin, in the Subcarpathia region and the Black Sea in XX century, oil and natural gas condensate production was recorded in 1972 – 14.4 million tons, and peak natural gas production in 1975 – 68.7 billion cubic meters. Gas production capacity reduced gradually after 1970’s and grew stable only in 1998. The annual gas production capacity in this region during the last 15 years varied between 18 and 21 billion cubic meters.

The reason of that is lack of investments to the exploration and production. Both state and private companies cannot invest significant costs to increase hydrocarbons productions. State production companies are selling gas for prices fixed by Regulator, which are lower than on the market and have minimum investment component. Private companies have to work in unstable regulatory environment, deal with complicated rules, corruptive officials, which make company’s activity slower, more expensive and create a lot political and financial risks.

Despite that, Ukraine still has a good basis to recover its hydrocarbons development sector. The system of education of technical specialists for oil and gas sector still exists; there is at least a dozen of high-profile universities of multi-disciplinary and technical focus which train specialists in some very specific discipline required in upstream. Applied science research institutes are usually state-owned enterprises subordinated to government institutions, but most capable and commercially active are those associated with Naftogaz and Ukrgazvydobuvannia. Many academics and professionals now are leaving the country for work abroad, but can come back as soon as situation in upstream sector will be improved.