The Ukrainian Foreign Trade Oil and Gas Corporation "Ukrzarubizhnaftogaz" was the first integrated project undertaken by NADRA GROUP's network business.
Ukrzarubizhnaftogaz (UFTOGC) was established in 1992 as a voluntary association of Ukrainian oil and gas companies.
The corporation united 37 enterprises, including geological exploration service companies, plants manufacturing tools, machine-building and pipe products required for the needs of the oil and gas industry, and R&D institutions. The founders of the corporation with the largest shares in the authorized capital were Naftogaz of Ukraine NJSC (successor to Ukrgazprom OJSC) (31.25%), Ukrnafta OJSC (25.0%), and Chornomornaftogaz SPE (State Production Enterprise) (8.75%). Among the specialized service companies, NADRA GROUP held a share of 2.5%. The corporation's head office was located in Kyiv, and it had branches in Khariv, Uzhhorod, Simferopol, Odesa, Vinnytsia, Chernivtsi, and Ivano-Frankivsk.
The mission of Ukrzarubizhnaftogaz (UFTOGC) was to export goods and technical services of Ukrainian oil and gas companies. The corporation actively searched for new markets for Ukrainian goods and services.
In particular, Ukrzarubizhnaftogaz was tasked by the Government of Ukraine to conclude barter agreements with Russian oil and gas companies and to export products and services of Ukrainian enterprises such as Khartsyzsk Pipe Plant, Drohobych Chisel Plant, Stryi Plant "Metalist," Kremenchuk Automobile Plant, Karpatnaftomash OJSC, Kyiv Plant "Geofizprylad" OJSC, and many others, totaling about 100 companies.
In exchange for Ukrainian products and services, crude oil was transported from Western Siberia through a system of main oil pipelines and delivered to two then-operating Lysychansky and Kremenchug refineries. The petroleum products received from them were transported by rail and sold exclusively to Ukrainian consumers. Heavy fuel oil was mainly supplied to sugar factories, thermal power plants, and iron-and-steel works. Light oil products were sold for cash, particularly to agricultural producers.
In compliance with state programs, the corporation supplied products and services from 98 Ukrainian oil and gas enterprises to oil and gas production enterprises in the Tyumen region of the Russian Federation. This was done in exchange for counter oil supplies to Ukraine, as per the Resolutions of the Cabinet of Ministers of Ukraine "On measures to ensure oil supplies to Ukraine in 1993 and the participation of Ukrainian enterprises and organizations in the development of the West Siberian oil and gas complex" dated February 27, 1993, No. 139, and "On measures to ensure the current year's supply of oil to Ukraine in lieu of operations in the oil and gas regions of the Russian Federation and supply of material and technical and food resources and consumer goods to them" dated April 28, 1994, No. 265. Additionally, Gazprom PJSC and its subsidiaries were used to repay the debts of Ukrgazprom JSC for the used Russian natural gas, in accordance with the Resolution of the Cabinet of Ministers of Ukraine "On supplies of products to Russian Enterprises to set off debts for natural gas and oil" dated March 5, 1994, No. 152. Thus, the corporation engaged in barter transactions to settle payments for oil and gas supplied from the Russian Federation to Ukraine with the products and services of Ukrainian enterprises.
Under agreements with the Government of Turkmenistan and Turkmen oil and gas companies, Ukraine supplied oilfield well logging, drilling, and other equipment, as well as constructed gas pipelines and compressor stations. Additionally, scientific and technical cooperation in the oil and gas industry was carried out between the two countries. Moreover, contracts for the supply of equipment to Azerbaijan and Kazakhstan were also signed and fulfilled.
In order to expand the reach of Ukrainian oil and gas companies to far-abroad markets, particularly in Southeast Asia, a representative office was established in the Changzhou Free Economic Zone in China. Preparatory work was also carried out for participating in tenders for gas well repairs in Egypt, drilling of oil and gas wells in Sudan and Yemen, and hydrogeological drilling in Jordan. The corporation's work was completed in 1997 when Ukraine and Russia switched to cash settlements.
As a member of the corporation, NADRA GROUP took an active part in its projects, organizing research and design work, providing geological and geophysical services by Ukrainian service companies, and supplying geological, geophysical, drilling, and oil and gas equipment. Thanks to the work of NADRA GROUP, dozens of Ukrainian companies in the exploration and oil and gas industries were able to continue their activities, as they were paid in the national currency obtained from the sale of Russian oil and gas by Ukrzarubizhnaftogaz on the domestic market of Ukraine.
On behalf of Ukrzarubizhnaftogaz UFTOGC, NADRA GROUP conducted marketing research regarding foreign markets and promoted products and services of Ukrainian enterprises at international oil and gas exhibitions and conferences in various cities, including Almaty (Kazakhstan), Ashgabat (Turkmenistan), Kyiv (Ukraine), Moscow (Russia), Beijing (China), Istanbul (Turkey), among others.
During its cooperation with Ukrzarubizhnaftogaz, NADRA GROUP demonstrated its ability to carry out large-scale integrated projects by consolidating the scientific and technical capabilities of Ukrainian enterprises. As a result, many Ukrainian producers of goods and services were able to develop and modernize their basic infrastructure while exploring new markets.
The knowledge and competencies that NADRA GROUP gained from its participation in the corporation's projects enabled the company to further develop its network business. Over time, NADRA GROUP's employees gradually gained more experience in organizing integrated projects, and the project management work of the partner network became their main focus of activity.
NADRA GROUP transformed into an international company, with its main business focus being the organization and implementation of projects involving a wide range of Ukrainian and foreign partner companies. Rather than providing services and manufacturing tools and equipment through its own affiliated service and production enterprises, NADRA GROUP became an operational center and general contractor in the implementation of various projects by leveraging an extensive partner network of enterprises.
Over time, it became clear to NADRA GROUP that it was nearly impossible for Ukrainian enterprises to access the service markets of countries with solid oil and gas reserves. Large global companies such as Schlumberger, Halliburton Company, Baker Hughes, Weatherford, and SGG VERITAS had been operating in such markets for many years, making competition difficult and not always profitable. However, the service markets of countries with low service volumes, such as Ukraine, were more accessible to small and medium-sized high-tech companies, both domestic and foreign. These markets do not allow for the purchase of equipment or the establishment of local service companies, as the volume of orders often makes it impossible to recoup the cost of equipment.
As a result, NADRA GROUP acted as a local partner of such companies, particularly in Ukraine. It conducted marketing research, assisted in the conclusion of commercial agreements, engaged in logistics, and provided the necessary resources to support their operations.
The network of partner companies was rapidly expanding, opening up significant opportunities for NADRA GROUP to develop new business lines.