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Mexican, Ukrainian officials mining LAGCOE in Lafayette for help in developing their oil and gas fields

Oct 27, 2015

Two countries with legacies of state-owned oil and gas resources asked American firms at LAGCOE on Tuesday for help in making their energy fields more commercial and efficient.

Delegations from Ukraine and Mexico touted their countries’ moves to privatizing their energy fields and told American oil and gas personnel attending the Louisiana Gulf Coast Oil Exhibition in Lafayette they need private sector know-how.

"We need some help,” said Vadym Glamazdin, a deputy minister of energy on the Ukraine Cabinet of Ministries. Glamazdin said Ukraine is reaching out for expertise and "not just sitting and hoping it’s coming.”

Glamazdin said Ukraine has some of the largest reserves of natural gas in Europe. Ukraine, which was once part of the Soviet Union, is populated by passionate people who want efficient, transparent natural gas production and a fair marketplace, he said.

"To do that, passion is not enough,” Glamazdin said.

Oleg Prokhorenko, a former consultant with McKinsey & Co., is now CEO at Ukraine natural gas giant UkrGasVydobuvannya . The country has recruited experts in finance and management educated at Ivy League American schools and trained at top-notch U.S. consulting companies like McKinsey & Co. and KPMG.

"We really do have ambitious plans,” Prokhorenko said. But the company that now produces 76 percent of Ukraine’s natural gas has much more below the ground that could be mined.

UGV has increased its sales and implemented savings measures of about $70 million a year, he said.

Prokhorenko also acknowledged that Ukraine’s oil and gas wells located in the Black Sea are tied up in "conflicts” with Russia at the moment. In early 2014, Russia seized Crimea, located in the southern part of Ukraine.

Prokhorenko said following the almost three-hour Ukraine presentation that Russian forces remain a threat to Ukraine and that any company that operates there faces risks. He said the threat has diminished in the last few months, but "obviously anything is possible.”

But the bulk of UGV’s reserves are in central Ukraine, away from where Russia’s troops are currently stationed, Prokhorenko said.

Before the presentation, Lafayette City-Parish President Joey Durel welcomed the seven-man Ukraine delegation and presented them with a ceremonial key to Lafayette.

One door down from the Ukraine presentation, Mexican officials too pressed their case for more direct investment in Mexico’s oil and gas fields by international oil and gas producers.

Guillermo Garcia Alcocer, head of policy for exploration and production at Mexico’s Ministry of Energy, said constitutional adjustments made in 2013 changed the country’s national energy company, Petróleos Mexicanos, or Pemex. Non-Mexican companies were once locked out of owning oil and gas in Mexico and off its coast. Now, non-Pemex companies are allowed to partner with the country and drill for hydrocarbons.

"We are asking U.S. companies to work with the Mexican reforms,” Garcia Alcocer said. "We are trying to have a very transparent model.”

Like Ukraine’s industry, Mexico needs help across the board, including the expertise of the oil and gas crowd attending the LAGCOE event this week.

"We need service companies and operators. We need finance companies,” Garcia Alcocer said.

He said Mexico will partner with the companies that offer his country the best deal.

Presentations continue at LAGCOE until the exhibition ends Thursday.

Billy Gunn | The Advocate