2023 PERFORMANCE

UEG achieved outstanding HSSE performance throughout 2023, with zero fatalities and major incidents. 

In 2023, UEG achieved an average daily gross oil and gas production of 167,826 barrels of oil equivalent with working interest daily production of 100, 407 barrels. In terms of exploration, UEG made 11 commercial discoveries, of which 7 were in Pakistan,3 in Egypt and 1 in Iraq. Net working interest share of 2P (Proved and Probable) reserves reached approximately 611.7 mmboe, and the reserve-production ratio was approximately 16.7. Performance metrics were excellent, mainly due to improved operating efficiency with continued focus on safety.

Block-9 in Iraq is a key asset of our Group. Its daily gross production reaching over 70,000 barrels. Construction of major central processing facilities (including oil and gas processing facilities) are  progressing swiftly. Once put into operation,  it will generate remarkable economic return while significantly reduce carbon emission. It is worth mentioning that our team in Block-9 is highly internationalized and diverse. Employees from more than 40 nationalities work together, demonstrating our values and the “united” culture of our Group. 

Pakistan witnessed continuous improvement in its macroeconomy. As largest foreign oil and gas producer in the country, our stable operation ensured local energy supplies. Leveraging on our favourable market position, we are actively exploring and seeking new business opportunities, to further expand our footprint in Pakistan.

In Egypt, our team continued to take effective measures to tap potential and increase operating efficiency through drilling good-producing new wells. As exploration aceage expanded, both potential performance and reserves witnessed a favorable increase. Production remained stable while we achieved desirable cost saving results. 

In 2023, we continued our focus on energy mix transition and investing in clean energy. In addition to investing in those projects in the countries where we operate oil and gas assets, such as Pakistan and Iraq, we are also actively exploring a few potential solar and wind power projects in Eastern Europe, which will pave the path to set up our clean energy business in Eastern Europe. The Group will continuously explore new opportunities in clean energy projects in MENA and other regions in the coming years.

The Group continued growing its CSR portfolio. We allocated significant resources to actively optimize our relationship with local communities in Pakistan, Iraq and Egypt. We participated in poverty alleviation and disaster relief,  invested in medical, educational projects and infrastructure, among other initiatives, to contribute to the welfare of local community. 

In terms of management strategy, we continued to focus on enhancing shareholder value by building a quality portfolio, improving operating efficiency and ensuring capital discipline. In the meantime,  we maintained a flexible dividend policy. Shareholder’s value is maximized through dynamic balancing between growth of business and commitment of payback.

The Group maintains a prudent financial policy. Cost saving and investment controls underpin our competitiveness. we continued to optimize our capital  structure, to ensure a healthy financial leverage, and solid cash balance. SAP system implementation during recent years further integrate our management systems to better support the business.

OUTLOOK

In 2024, we expect the global economy to continue to grow at a lower rate, as geopolitical factors and other uncertainties linger. On energy and commodity front, world oil demand growth is expected to increase, and oil price is projected to be at a relatively high level, amid dynamic rebalancing of supply and demand. 

As an integrated energy company, the Group will continue to focus on increased production and reserves growth to support energy demand whilst gaining momentum on its energy mix transition. It will continue to implement a low-cost strategy to ensure its competitiveness. It will further strengthen its operating strategies, which mainly include promoting high-quality development, maintaining prudent financial policy and investment decision-making and pursuing a sustainable development model.

In 2024, Group will target an average daily gross production range of 176,300 to 197,600 barrels with average daily working interest production range of 101,600 to 113,500 barrels. Capital expenditure is anticipated to reach US$880 million to US$930 million, which is essential to support the exploration, production and development plans of the Group.

As part of its long term plans, from the perspective of decarbonization and sustainability, UEG aims to expand its clean energy portfolio and invest over GWs clean energy projects in Europe, MENA and Central Asia. the Group will continue exploring integrating environmental friendly solutions into its existing operations, to reduce carbon emission. UEG will also proactively develop its carbon credit trading segment and advance on the roadmap to make its business carbon neutral.

HSSE will remain our top priority. As the business grows, we will continue to maintain high HSSE standards in line with our commitment to safe operations. Improved integrated systems and technology application will help run efficient and safe operations. Undoubtedly, good HSSE performance is the prerequisite to achieving operational excellence and financial targets. 

With regard to financial management, the Group is committed to a more optimized and comprehensive capital structure. We remain prudent with our finances, and strong balance sheet gives us financial flexibility needed to support business growth and continuously create value for our shareholders in the future.

For the year 2023, we have achieved satisfactory results, despite the challenges and uncertainties, which reflects resilience in our asset and management capability.. The year 2024 has arrived, UEG will spare no efforts in adjusting ourselves and responding with flexibility. I am confident that we will work together to achieve bigger goals.

Zhang Hong Wei
Chairman
28 March 2024