Sale of oil in Ukraine

"Despite the very challenging times that Ukraine is going through, Zhoda Investments continues its oil operations in Ukraine by producing crude oil of which the country is in great need. The operator of the oil field has managed to complete a sale of a substantial part of its inventory, which strengthens the operator's balance sheet and reduces the inventory risk", says Robert Karlsson, CEO of Zhoda Investments.

Zhoda has a joint venture with Ukraine's largest oil and gas company, which is owned by the Ukrainian state. The oil field in which Zhoda has a 45 per cent interest is located approximately 150 kilometers east of the capital Kyiv. The field and surrounding infrastructure are intact. Daily work is carried out and wells on the field are producing oil. Apart from a few weeks in the beginning of March 2022, no Russian troops have been in the area.

Part of Ukraine's refinery capacity has from time to time not been able to operate. As a consequence, entering into sales contracts has been complex. In the beginning of the year, the operator sold 4,000 barrels of oil and recently another 20,000 barrels were sold. The operator has received full payment for this oil and the funds have been used to pay production taxes to the state, settle accounts payable for oil services and strengthen working capital. The operator has another 12,000 barrels of oil in inventory.

The demand for crude oil in the world continues to increase. Ukraine is in great need of oil products for the country's economy and society to function normally. By producing crude oil in the country, Zhoda contributes to reducing Ukraine's energy dependence on its neighboring countries.

Production and inventory balances above are 45% net to Zhoda Investments.