Energy expert Mykhailo Pyrtko on the need for Ukraine to invest in its own gas production

 In my previous blog, I analyzed how the full-scale war has changed Ukraine’s energy sector and why renewables have become the foundation of a new development model. “Green” energy truly offers Ukraine strategic prospects for integration with Europe, but it cannot be the sole pillar in times of war and reconstruction. For system stability, a balance between renewable and traditional resources is essential — and here, domestic gas production plays a key role.

For decades, Ukraine has remained vulnerable due to its dependence on imported energy resources. Every geopolitical crisis — from the gas wars of the 2000s to the full-scale invasion — has shown how dangerous it is to rely on external supplies. That is why the development of domestic gas production today is not just an economic issue, but a matter of survival, energy security, and national resilience.

However, for this potential to turn into real results, certain conditions must be met: investor trust, clear rules of the game, and guarantees of capital protection. Without these, the sector will remain underfunded, and the country dependent on imports. At the same time, investment in gas production can become a logical extension of the “green” transformation: these two directions do not contradict one another but rather complement each other, creating an integrated and sustainable energy system.

Energy security as a strategic issue

The full-scale war has demonstrated that energy security is not an abstract concept, but a key factor in the survival of the state. When systematic attacks disable thermal and hydroelectric power plants, and power grids become targets for missiles, the country must rely on resources it can control within its own borders.

In this context, gas is not just fuel for heating or industry. It is a strategic resource that ensures stability at times when renewable generation cannot meet demand. During the cold winter months or peak load periods, gas remains the reserve that guarantees the uninterrupted functioning of the energy system.

Ukraine possesses significant reserves, but their potential has not yet been fully utilized. According to expert estimates, the country could cover 80–90% of its needs with domestic gas, but this requires investment in exploration, technology, and infrastructure modernization. This is not only an economic issue, but also one of sovereignty: the more gas we produce ourselves, the less dependent we are on political manipulation from abroad.

The experience of other countries confirms this logic. Poland focused on developing its own resources and diversifying imports through LNG terminals, which allowed it to quickly abandon Russian gas. Norway, on the other hand, turned domestic production into the foundation of its economic model and became Europe’s main supplier. For Ukraine, the signal is clear: domestic gas can become not only an internal pillar but also part of its integration with the European market.

Analytical section: Ukraine’s gas production potential

Ukraine ranks among the world’s top ten countries in terms of proven natural gas reserves. According to the State Service of Geology and Subsoil, balance reserves are estimated at 689 billion cubic meters, while prospective resources exceed 5.4 trillion cubic meters.

In 2021, production amounted to around 19.8 billion cubic meters, covering roughly two-thirds of domestic demand. After the start of the full-scale war, consumption volumes dropped sharply, which partially reduced dependence on imports.

Experts note that with stable investment and technological modernization, production could be increased to 25–27 billion cubic meters per year. This would allow the country to cover a larger share of its needs with domestic resources, especially considering the decline in industrial consumption caused by the war.

Thus, the issue is not so much a physical shortage of gas as it is the ability of the state and business to create conditions for scaling up production and attracting investment.

Trust factors for investors

No country can realize its energy ambitions without private investment. For Ukraine, this thesis has double importance: on the one hand, gas production requires significant capital investment in exploration, drilling, and infrastructure; on the other — the state budget in wartime is limited and cannot finance large-scale production growth. Therefore, the future of the sector directly depends on how effectively the state and society can create the conditions for investors to enter.

A key factor is the predictability of government policy. In the renewable energy sector, there was already a negative precedent when, after massive investment, the government revised the “green tariff.” This seriously undermined investor trust and forced many to reconsider their strategies. For gas production, such risks are unacceptable: contracts are signed for decades, and any change in conditions by the state effectively renders them invalid.

Equally important is protection against abuse and corporate raiding. Cases where foreign or Ukrainian companies, after receiving licenses, faced criminal pressure or attempts to seize their assets became widely known beyond the country. This creates the reputation of a high-risk market, sharply reducing investment inflows. Any guarantees provided to investors must work in practice — from the judicial system to law enforcement agencies.

A third aspect is transparency of procedures. The issuance of licenses for exploration and production, grid connections, and the conduct of tenders and auctions must take place under clear and competitive rules. Any lack of transparency or selective approach immediately creates suspicion of corruption and deters serious players.

It is also important to mention guarantees of financial settlements. In the renewable sector, delays in payments from state institutions became a systemic problem. If a similar situation were to occur in the gas sector, it would completely block the path for new investment. Ukraine must therefore demonstrate its ability to honor commitments to businesses, even under the difficult conditions of war.

Thus, investors need not only attractive geological prospects but, above all, trust in the rules of the game. Without this, even the richest deposits will remain out of reach. Ukraine’s domestic gas production depends not on the mere presence of resources, but on our ability to guarantee investors fairness, stability, and protection.

International practice shows that even in high-risk countries, investors are willing to work if clear guarantee mechanisms are in place. Institutions such as IFC, EBRD, or MIGA act as lenders and insurers for private businesses, reducing political and regulatory risks. Ukraine can also make use of these instruments to make its market more attractive to global companies.

Not only gas: a comprehensive approach

The development of domestic gas production is a strategic necessity, but it cannot be the sole answer to Ukraine’s energy challenges. Gas provides stability during the transition period, yet the long-term model must be based on a combination of traditional and renewable energy sources.

Renewables make the system more resilient, since decentralized solar and wind plants are less vulnerable to attacks. In this balance, gas plays the role of a “reserve,” capable of covering demand during peak hours or cold seasons. Such a symbiosis reduces risks and creates a foundation for integration into the European energy space.

The EU encourages diversification of energy sources, and Ukraine can become part of this process. Using gas together with renewables and promising directions — such as green hydrogen — opens the way not only to internal independence, but also to turning the country into an energy exporter.

Thus, the challenge is not choosing between “gas or renewables,” but creating a comprehensive model where both directions serve a common goal: energy resilience, security, and integration with the EU.

Conclusion

The development of domestic gas production today is a strategic prerequisite for the survival and independence of the state. Combined with renewable sources, it forms the foundation of a resilient energy system capable of withstanding the challenges of war and ensuring Ukraine’s integration into the European market.

The main challenge is not the lack of resources, but the creation of conditions for investment: stable rules of the game, transparent procedures, and reliable protection of businesses. Without these, even the richest deposits will remain unrealized potential.

Ukraine has a unique opportunity to use its own gas as an “energy bridge” toward green transformation, to secure its resources, strengthen sovereignty, and at the same time position itself as a reliable partner for Europe. The decisions we make today will determine the country’s energy independence for decades to come.