Scenarios of Change of Enterprises in the Conditions of Digitalization

Liliana Horal

, Svitlana Korol

, Inesa Khvostina

Natalia Yashcheritsyna

, Vira Shyiko

and Alla Maksimova

Ivano-Frankivsk National Technical University of Oil and Gas, Ivano-Frankivsk, Ukraine

Vocational College of State University of Economics and Technology, Kryvyi Rih, Ukraine

Keywords: Development Scenarios, Digitalization, Oil Transportation, Financial Forecasts, Oil Pipeline Company.

Abstract: The paper investigates the issues of determining possible scenarios for the development of oil pipeline

enterprises under the influence of digitalization. On the basis of the online platform "Google Trends" the

relevance of the study of "digitalization" is substantiated, its significance in Ukraine and the world is

determined. On the basis of domestic and foreign scientists researches, statistical data, review of normative-

legal base it is offered to define three kinds pipeline transport of oil enterprises development scenarios in

digital space. The main assumptions for the baseline and pessimistic scenarios are put forward, which allowed

to predict the directions of development of the enterprise. Taking into account the forecasts of state companies

on the volume and prices of sales of products (goods, works, services) in 2020 - 2023; forecast indicators of

economic and social development of Ukraine for 2021 - 2023; strategic guidelines of the energy strategy of

Ukraine for the period up to 2035; norms of deduction to the state budget of the corresponding payments the

basic reference points for the investigated enterprise which should be realized under the conditions of any

scenario of their development for the near future are allocated. A visual presentation of scenarios for their

development.

1 INTRODUCTION

Due to the critical decline in oil production and

refining at refineries, Ukraine is overly dependent on

imported raw materials, so the use of the transit

potential of the oil transportation network is

particularly important, including for energy stability

in the economy. Reliability and continuity of

hydrocarbon supply are factors of sustainable

development of the state, as pipeline transport is the

most environmentally friendly, cost-effective and

technologically simple means of hydrocarbon supply.

However, in the time of dynamic information

changes, research has become relevant to determine

the scenarios of their development in the context of

digitalization, which plays a decisive role both

indirectly and directly. It is important to study the

level of economic digitization and society as a whole

https://orcid.org/0000-0001-6066-5619

https://orcid.org/0000-0002-4804-7612

https://orcid.org/0000-0001-5915-749X

https://orcid.org/0000-0002-2926-5550

https://orcid.org/0000-0002-2822-0641

https://orcid.org/0000-0003-3556-3148

in different countries with the initial data of the

ranking of global digital competitiveness for the

retrospective period. Research, in fact, should be

based on the results of a comparative assessment of

countries' ability to perceive and effectively use

digital technologies as a way to change regulatory

practices, business models and society as a whole.

And on this basis it is necessary to single out the place

of Ukraine among the digitalized space, which in the

future will allow to emphasize the highly specialized

issues in the direction of the oil transportation

industry. The above indicates that the relevance of the

chosen issue is timely and essential.

382

Horal, L., Korol, S., Khvostina, I., Yashcheritsyna, N., Shyiko, V. and Maksimova, A.

Scenarios of Change of Enterprises in the Conditions of Digitalization.

DOI: 10.5220/0011360800003350

In Proceedings of the 5th International Scientiﬁc Congress Society of Ambient Intelligence (ISC SAI 2022) - Sustainable Development and Global Climate Change, pages 382-393

ISBN: 978-989-758-600-2

 2022 by SCITEPRESS – Science and Technology Publications, Lda. All rights reser ved

2 LITERATURE REVIEW

In the period of permanent changes, the process of

digitalization is of great interest, because its skillful

application provides dominant features in a

competitive environment. Obviously, the nature of

such changes produces the search for alternatives,

scenarios and strategies. In the range of such

transformations, considerable attention is paid to the

issues of effective implementation of digitalization.

Outdated technologies, methods of communication,

motivation systems and ill-considered decisions, lead

to the need for digital development of industrial

enterprises, as noted by the authors Horal L., Korol

S., Havrylenko M., Hvostina I. and Shyiko V. (Horal

et al., 2020).

According to K. Kuprina and D. Khazanova,

digitalization is a way to digitize any kind of

information (Kuprina, 2016). O. Halapsis takes a

slightly different position on this issue, defining

digitalization not as a method, but as a process related

to the tendency to bring into electronic form a variety

of information types used by man, the researcher

tentatively called "digitization of being" (Halapsis,

2006).

Given the above, it is difficult to agree with the

opinion of A. Koptelov, who distinguishes

digitization ("digitization") from digitalization

("digitization"), defines the latter as the process of

creating a new product that originally exists in digital

form and can not be transferred to physical media

without significantly reducing its quality (Koptelova,

2021).

Simultaneously, companies in terms of

digitization play a decisive role in achieving the

Sustainable Development Goals (SDGs) (Allen et al.,

2019). Under sustainable development is understood

“development that meets current needs without

compromising the capabilities of future generations

satisfying their own needs” (World Commission on

Environment and Development [WCED], 1987)

(World Commission on Environment and

Development, 1987). The concept integrates

economic, social, environmental, and

intergenerational dimensions (WCED, 1987) (World

Commission on Environment and Development,

1987). Sustainable development is not an end state

that can be achieved, but a “moving target” that is

continuously changing (Gaziulusoy et al., 2013)

(Gaziulusoy et al., 2013). Hence, the concept of

sustainable development emphasizes that human

well-being and environmental sustainability are

influenced by one another, while being integrated

across space and time (WCED, 1987) (World

Commission on Environment and Development,

1987).

Companies are increasingly engaging with

sustainable development and most large companies

say to embrace the SDGs. However, the world is

hardly developing in a sustainable direction. As

progress is too slow around the world (Independent

Group of Scientists appointed by the Secretary-

General, 2019 (Independent Group of Scientists

appointed by the Secretary-General., 2019; Sachs et

al., 2019), there is increasing consensus that “a much

deeper, faster and more ambitious response [is

needed] to unleash the social and economic

transformation needed to achieve our 2030 goals”

(UN, 2019, p. 2) (United Nations, 2019). In turn,

sustainable development is critical for companies'

activities. Companies depend on ecosystems and on

economic and social capital (Whiteman et al., 2013;

Williams et al., 2017; Winn & Pogutz, 2013).

3 APPLICATION, ANALYSIS AND

DISCUSSIONS

Under the current development conditions Ukrainian

oil transportation industry development, which are

produced by the challenges of the digital environment

and the limitations of the Covid-19 pandemic, the

requirements for adaptability, flexibility and quality

in the activities of oil transportation companies are

growing. Each of them, in particular JSC

"Ukrtransnafta" is in search of alternative solutions,

in choosing the guidelines of its development and

determining the strategic direction of development.

When faced with problems on a daily basis, they are

faced with the question of choosing goals, methods,

tools and means that would help determine and

adhere to the scenario of their development. In fact,

in order to choose the most effective one, it is

necessary to operate not only with the current

management system, but also with the current state of

their development, in particular in the context of

digitalization.

Therefore, first of all, examining the interpretation

of the definition of "digitalization" in Ukraine, we can

say that over the past five years, interest in this

category has grown significantly, especially this year,

which indicates the timeliness and need for its

implementation (Fig. 1 ).

The data of fig. 1 indicate that domestic interest in

this category began only recently, in particular in

2018, but most studies fall on 2021.

Scenarios of Change of Enterprises in the Conditions of Digitalization

383

The same situation is observed in the world (Fig.

2).

Generally speaking, we can say the last 2-3 years

direction arouses great interest digitization, due to

competitive advantages, including: providing added

value to goods through quality services; high-level

communication; enhancing company image; lower

prices through process automation and digitization of

business processes; transparency of internal and

external processes; increased customer loyalty to the

company (Ligonenko et al., 2018).

Figure 1: Dynamics of research on the definition of "digitalization" in Ukraine for 2016-2021.

Source: generated by the authors on the platform (Trends Google, 2021)

At the same time, digitization expands the

information space by reducing the information costs

of creating new information products. Obviously, this

significantly speeds up and simplifies the search for

information, information exchange and strengthens

cooperation between enterprises. This, in turn, affects

the working methods of enterprises, the search for

favorable living conditions and the quality of

interaction between the population and its authorities.

Under such conditions, scientists consider changes in

economic processes, repositioning of production to

create material products of services, and globalization

of the economy to be the most important signs of the

development of a new society in the era of

informatization and digitalization (Dubyna &

Kozlyanchenko, 2019).

Figure 2: Dynamics of research on the definition of "digitalization" in the world for 2016-2021.

Source: generated by the authors on the platform (Trends Google, 2021)

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At the same time, comparative data on the level of

digitalization of the economy and society as a whole

in different countries, which are included, in

particular, in the Global Digital Competitiveness

Rating, are of interest (The IMD World Digital

Competitiveness Ranking, 2020).

Diagnosis of countries in this ranking is based on

their ability to successfully apply digital technologies,

which are a tool to change not only regulatory

practices but also business models and society as a

whole.

This assessment is based on three complex

factors, which have acquired the following typicaled

names: knowledge, technological environment,

openness to the future. In the future, each factor

divided into three subfactors, which, in turn, are

detailed using six indicators. The knowledge factor

means the system of knowledge necessary for the

discovery, understanding and creation of new

technologies and which are divided into the following

three subfactors: talent, education and retraining,

scientific concentration. The factor "technological

environment" is divided as a subfactor into regulatory

framework conditions, capital and technological

framework conditions. Future openness is specified

through sub-factors such as adaptability, business

agility, and IT integration (The IMD World Digital

Competitiveness Ranking, 2020).

In 2020, the United States held the number one

spot in this ranking, with all five of the best

economies in the country, the index has not changed:

the United States, Singapore, Denmark, Sweden and

Hong Kong South Africa (Table 1).

Table 1: The dynamics of the level of digitalization level in the world, estimated on the based of key metrics in 2020.

General assessment and by individual factors

2020 yea

USA

Singapore

Denmark

Sweden

Hong Kong

CAP

Switzerland

Netherlands

Republic of

Korea

Norway

Finland

Overall ratin

1 2 3 4 5 6 7 8 9 10

1. Knowled

e 1 2 6 4 7 3 14 10 16 15

2. Technological environment 7 1 9 6 2 11 8 12 3 10

3. Openness to the future 2 12 1 7 10 5 4 3 6 9

Source: generated by the author according to the data (The IMD World Digital Competitiveness Ranking, 2020).

US activity is largely determined by knowledge

factors and future readiness. More specifically, this is

supported by factors related to scientific

concentration (eg percentage of scientific and

technical employment and use of robots in education

and R&D, capital (eg venture capital), adaptive

settings (eg e-participation) and business agility). for

example, world robots distribution or percentage of

world robots).

The top 10 economies remain the same as in

previous years. The United States continues to lead

the IMD World Digital Competitiveness Rating for

the third year in a row. Similarly, Singapore remains

in second place. While Denmark is ahead of Sweden,

rising one place (3rd place and 4th, respectively),

CAP-Hong Kong rises three places to 5th.

Switzerland falls to 6th place (from 5th) and similarly

the Netherlands falls to 7th (from 6th). The Republic

of Korea moves up to 8th (out of 10), Norway remains

in 9th and Finland up in the top 10, dropping 3 places

from 7th.

Ukraine is improving, moving up two places from

60th to 58th, driven by talent, especially digital /

technological skills (40-27), e-participation (53-39th)

and agility of companies (47th to 58th). 33rd) (Table

2).

Table 2: Dynamics of the level of digitalization in Ukraine, estimated on the basis of key indicators set for 2015-2020.

General assessment and by individual factors

Years

2015 2016 2017 2018 2019 2020

Overall rating

59 59 60 58 60 58

1. Knowledge

40 44 45 39 40 38

2. Technological environment

60 60 62 61 61 59

3. Openness to the future

61 61 61 61 62 61

Source: generated by the author according to the data (The IMD World Digital Competitiveness Ranking, 2020).

Scenarios of Change of Enterprises in the Conditions of Digitalization

385

At the same time, in order to state the relevance of

the study on digitalization purely in industrial

enterprises in the context of identifying scenarios for

their development, in particular in the context of oil

pipelines, we use the tool "Google Trends". It makes

it possible to investigate the timeliness of research

through the widespread use of queries. Therefore, we

will choose the oil transportation company JSC

Ukrtransnafta as the only national operator that

provides services for transportation of oil by pipeline

to oil refineries of Ukraine and oil transit to Eastern

and Central Europe (Official site of Ukrtransnafta

JSC, 2021), and explore it among domestic and

foreign consumers (Fig. 3).

The data of fig. 3 indicate that the global interest

in this category, both the concept and the research of

the company itself, over the past five years has a steep

trend. Ukrtransnafta JSC reached the highest peak of

popularity in 2018 and did not leave its consumers

unattended during the entire research period.

Consumers from countries such as the Belarus,

Ukraine, Russia, Germany and Poland have shown

the greatest interest in the domestic oil transportation

company (Fig. 4).

Figure 3: Popularity of Ukrtransnafta JSC (Ukrtransnafta) query in Google search engine in the world.

Source: generated by the author on the platform (Trends Google, 2021)

As we can see, the popularity of requests

fluctuates greatly, this situation indicates the need to

use digitalization tools to improve the efficiency of

the "Internet" of oil transportation companies.

Figure 4: Popularity of the query JSC "Ukrtransnafta" (Ukrtransnafta) in the Google search engine among the countries of

the world.

Source: generated by the author on the platform (Trends Google, 2021)

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This, in turn, indicates that the strategic

perspective needs to focus more on digitization

processes through more active implementation.

However, in general, the conceptual framework of

digitalization and Ukraine's energy strategy for the

period up to 2035 indicate that industrial enterprises,

including oil, follow the digitalization strategy, which

helps to abandon paperwork, increase transparency of

business processes, reliability and efficiency of data.

control access to information.

Therefore, the current field of activity of the oil

sector is characterized by the total volume of

transported oil of JSC "Ukrtransnafta", which

according to the results of 2020. is 15.7 million tons,

which is 1.5% more than in 2019. The volume of oil

transportation for Ukrainian refineries increased by

8.9% (to 2.6 million tons), and transit decreased by

0.4% to 13.1 million tons (compared to 2019)

(Official site of Ukrtransnafta JSC. 2021; Pavlova et

al., 2021). The contract with PJSC Transneft, signed

for 10 years (until the end of 2029), allows

Ukrtransnafta JSC to pump at least 15 million tons of

oil per year through the Druzhba oil pipeline. At the

same time, unlike gas contracts, the contract does not

provide for any obligations in terms of pumping

volumes (PJSC "Transneft" acts as a logistics

company that transports oil at the request of oil

companies)

(Ukraine 2020-2021: unjustified

expectations, unexpected challenges (analytical

assessments), 2020). During 2020 The share of

gasoline imports from Belarus increased from 67% to

78% (by 163 thousand tons), while the volume of

supplies from Lithuania decreased by 32% to 21% (to

235.1 thousand tons), due to the proposal of

Belarusian Oil Company Ukraine to sell gasoline in

the portfolio of diesel fuel under thermal contracts

(Official site of the company "Consulting Group A-

95", 2021).

At the same time, the volume of domestic oil

refining is extremely low: Shebelinsky gas refinery is

underloaded, and the volume of refining at the

Kremenchug refinery amounted to 3 million tons

(with a capacity of 18 million tons per year, and the

possibility of refining at the level of "Euro-5" - 7

million tons).

The EU4Energy Governance technical assistance

project for the implementation of Directive 2009/119

/ EU for the purpose of establishing minimum stocks

of oil and petroleum products in Ukraine (IOS) has

also been completed. According to the method of

calculating the volume of stock, it should be 90 days

of imports. From June to November 2020,

representatives of the Verkhovna Rada, the State

Reserve and the Ministry of Energy worked together

with experts from the Secretariat of the Energy

Community to implement this important element of

the country's energy independence )Ukraine 2020-

2021: unjustified expectations, unexpected

challenges (analytical assessments), 2020).

It is obvious that the further situation in the oil

transportation industry will be determined according

to the current state of development in Ukraine and its

guidelines for the future. In particular, in accordance

with the decision of the Cabinet of Ministers of

Ukraine dated 29.07.2020 № 671 "On approval of the

Forecast of economic and social development of

Ukraine for 2021 - 2023" projected indicators of

economic and social development of Ukraine for

2021 - 2023.

In accordance with this normative legal act, the

forecast is developed according to the most probable

scenario, which takes into account the analysis of

economic development in the retrospective period,

the current economic situation due to force majeure

and its consequences for Ukraine, and assumptions

that with taking into account the impact of future

external and internal factors. In the baseline scenario,

one of the main assumptions is the end of the global

COVID-19 pandemic in 2020 (Resolution of the

Cabinet of Ministers of Ukraine, 2020).

Also, given the significant uncertainty in the

forecasts of development, especially the world

economy and the duration and recurrence of the

COVID-19 pandemic, the Forecast summarizes two

alternative scenarios, which provide a more

successful for most economically developed

countries to overcome the effects of the pandemic,

protracted, with a corresponding impact on Ukraine's

economic development. The Forecast also identifies

potential development risks that are not considered in

any of the scenarios.

The baseline scenario envisages a resumption of

the positive trend of economic development after

significant losses from the global COVID-19

pandemic in the world in 2020, and forecasts: GDP

growth of 4.6% in 2021, 4.3% in 2022 and 4.7 % in

2023; the consumer price index (December to

December of the previous year) is expected at 107.3%

in 2021, 106.2% in 2022 and 105.3% in 2023;

increase in the real average monthly salary of

employees - at 12.1% in 2021, 6.0% in 2022 and 5.1%

in 2023; the unemployment rate in 2021 - 9.2%, in

2022 - 8.5%, in 2023 - 8.0%; growth of exports of

goods and services at 2.9% in 2021 with a further

increase in growth to 6.4% in 2022 and to 8.2% in

2023 (Resolution of the Cabinet of Ministers of

Ukraine, 2020).

Scenarios of Change of Enterprises in the Conditions of Digitalization

387

Subsequently, when finalizing the Forecast, the

conditions for raising the minimum wage to UAH

7,176 were taken into account. in 2023 and beyond,

this document became a platform for strategic

decision-making by the authorities. At the same time,

this forecast determined medium-term vectors for

business and investors, and forecast macroeconomic

indicators were the foundation during the preparation

of the draft State Budget of Ukraine for 2021.

At the same time, the strategic guidelines of

Ukraine's energy strategy for the period up to 2035,

approved by the Cabinet of Ministers of Ukraine

dated 18.08.2017 № 605-r "On approval of Ukraine's

energy strategy for the period up to 2035" Security,

energy efficiency, competitiveness " components of

oil transportation and present diversification of

supplies, namely (Order of the Cabinet of Ministers

of Ukraine, 2017):

1) maintenance of Ukraines oil pipeline

system in a proper technical condition by means of

service, inspection, repair, reconstruction, technical

re-equipment of the equipment, systems and objects

of oil pipeline system provided by regulatory

documents;

2) further increase the efficiency of the system

in order to ensure its competitiveness in the market of

oil transportation services;

3) effective use of oil pipeline system

capacities of Ukraine for reliable operation of existing

oil transportation routes and creation of new

directions of transportation;

4) attracting new volumes for oil

transportation to domestic refineries, and transit

through Ukraine;

5) active participation in projects of

integration of Ukraines oil pipeline system with oil

transportation systems and oil refining capacities of

other countries for the organization of alternative

supplies;

6) increasing the competitiveness of oil

supplies from alternative sources through tariff

policy, reduction of port dues, etc .;

7) ensuring the protection of investments in oil

transportation projects;

8) introduction of modern technologies of

transportation of different grades and blending

(mixing) of oil;

9) ensuring high environmental standards of

activity;

10) development of offshore oil transportation

infrastructure facilities for the purpose of ensuring

flexibility and multimodality of supply of petroleum

and/or petroleum products;

11) improving the efficiency of the existing

infrastructure for the supply of non-Russian oil to

Europe;

12) measures to promote the implementation of

trans-European pipeline projects.

In order to propose scenarios for the development

of oil transportation companies, it is still necessary to

focus on the forecasts of state companies on the

volume and prices of products (goods, works,

services) in 2020 - 2023 and standards for deductions

to the state budget. The purpose of analyzing their

scenarios is to provide a financial assessment of some

of the fiscal risks that the Government may face from

large state-owned companies by 2023. The key issue

of the analysis is the financial results of state-owned

companies in the face of negative macroeconomic

shocks.

The model considers the basic, stressful and

optimistic scenarios of possible developments, which

are based on forecasts (expectations) of state

companies on the volume and prices of sales of

products (goods, works, services) in 2020 - 2023;

forecast indicators of economic and social

development of Ukraine for 2021 - 2023, approved by

the resolution of the Cabinet of Ministers of Ukraine

of 29.07.2020 № 671 "On approval of the Forecast of

economic and social development of Ukraine for

2021 - 2023"; norms of deductions to the state budget

of the corresponding payments (Resolution of the

Cabinet of Ministers of Ukraine, 2020).

The risk assessment as a result of the analysis

reflects the possible trend of financial forecasts under

the implementation of different scenarios and may

deviate from the actual situation due to the impact of

events not taken into account in the scenarios.

So, according to the forecast of economic and

social development of Ukraine for 2021 - 2023

(Resolution of the Cabinet of Ministers of Ukraine,

2020).

JSC Naftogaz of Ukraine and its subsidiaries

(Naftogaz Group) until 2023 will continue to carry

out a full cycle of operations on exploration and

development of oil and gas fields, operational and oil

and gas exploration drilling, transportation and

storage, sale and supply of natural gas and petroleum

products to consumers.

The main subsidiaries and joint activities until

2023 are presented as follows: production of gas, oil

and products of their processing: JSC

"Ukrgazvydobuvannya" (share: 100.0% of shares);

PJSC "Ukrnafta" (share: 50.0 + 1 share); Petrosanan,

joint venture with the Arab Republic of Egypt and the

Egyptian General Petroleum Corporation (share:

50.0% of shares); SE "Zakordonneftogaz" (share:

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100.0% of shares); Karpatigaz LLC, joint activity

with Misen Enterprises AB (share: 49.99% of shares);

transportation of oil and gas: JSC "Ukrtransgaz", JSC

"Ukrtransnafta", JSC "Ukrspetstransgaz" (all share:

100.0% of shares); wholesale and retail trade in oil,

gas and products of their refining: SC "Gas of

Ukraine" (share: 100.0% of shares); Naftogaz

Ukrainy Gas Supply Company LLC (share: 100.0%

of shares); Naftogaz Trading Gas Supply Company

LLC (share: 100.0% of shares); Naftogaz Trading

Europe AG (share: 100.0% of shares, Switzerland);

OJSC Kirovogradgaz (share: 51.0% of shares);

Ukravtogaz (share: 100.0% of shares) (Resolution of

the Cabinet of Ministers of Ukraine, 2020).

According to the forecast of economic and social

development of Ukraine for 2021-2023 we forecast

the amount of net profit (loss) of Naftogaz until 2023

(Table 3).

Table 3: Net profit (loss) of Naftogaz Group (UAH million) for 2018-2023.

es of scenarios 2018 2019 2020 2021

(

forecast

)

2022

(

forecast

)

2023

(

forecast

)

Baseline scenario 11567 63294

(

18002

)

7 827 15 801 15 806

Stress scenario 11567 63294 (18002) (2180) (1960) (1870)

Optimistic scenario 11567 63294 (18002) 1450 1090 970

Source: calculated by the authors taking into account (Resolution of the Cabinet of Ministers of Ukraine, 2020).

Modeling of Naftogaz Group activity was carried

out on the basis of forecasts of JSC Naftogaz of

Ukraine regarding volumes and prices of sales in

2020-2023 (considered as a baseline scenario).

At the same time, regardless of the scenarios

considered in the model, the Naftogaz Group's current

liquidity ratio is projected to be consistently high in

2020-2023. It is calculated as the ratio of current

assets to short-term (current) liabilities ), which

indicates the sufficiency of working capital to meet

current obligations.

Therefore, regardless of the scenarios considered

in the model, in the absence of growth in sales and

prices that will ensure profitability, without receiving

JSC "NJSC" Naftogaz of Ukraine "in 2020 funds

from the state budget as compensation for special

duties in the amount UAH 32.2 billion, there was a

loss-making activity of the Naftogaz Group in 2020-

2023, which will have a negative impact on the

amount of payments to the state budget.

This information on possible performance

indicators of the Naftogaz Group in 2020-2023 is

estimated, does not take into account all possible

revenues and expenses of the Group's companies, and

cannot be considered as a guarantee of such indicators

in the future. At the same time, taking into account

the modeling of NJSC Naftogaz of Ukraine in

accordance with the forecasts for 2021-2024, it is

necessary to pay attention to the corporate component

of the strategy, as after the change in 2021 operating

model and results of the Naftogaz Group (Information

on fiscal risks and their impact on the state budget in

2022, 2021). Based on this, the main assumptions for

the baseline and pessimistic scenarios are made

(Table 4).

Table 4: Basic assumptions for baseline and pessimistic scenarios (Information on fiscal risks and their impact on the state

budget in 2022, 2021).

Baseline Pessimistic

The forecast on volumes, prices of purchase and sale of

products in 2021 - 2024 is taken into account in accordance

with the ex

ectations of the Com

The forecast of volumes, purchase and sale prices in 2021

- 2024 is taken into account in accordance with the

Com

's ex

ectations.

Transit revenues - according to the 5-year contract with

Gazprom and expenses - according to the contract with the

trans

ort s

stem o

erator.

Transit revenues - according to the 5-year contract with

Gazprom and expenses - according to the contract with

the trans

ort s

stem o

erator.

The growth of the Company's operating expenses is taken

into account at the level of growth of consumer price indices

and producer prices, according to the forecast approved by

the resolution of the Cabinet of Ministers of Ukraine from

31.05.2021 № 586.

Expectations for growth of consumer prices and producer

prices are taken into account in accordance with the

alternative scenario of the forecast approved by the

resolution of the Cabinet of Ministers of Ukraine from

31.05.2021 № 586.

Expectations to change the exchange rate are taken into

account in accordance with the forecast approved by the

Cabinet of Ministers of Ukraine 31.05.2021 № 586.

Assumptions about the exchange rate change at the level

of + 5% per year compared to the baseline scenario are

taken into account.

Expectations that the Company will receive income from

participation in the capital of Naftogaz Group enterprises in

2021 - 2024 are taken into account at the level of indicators

of the financial

lan of NJSC Nafto

az of Ukraine for 2021.

It is assumed that the Company will not receive income

from participation in the capital of Naftogaz Group

enterprises in 2021 - 2024.

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389

In accordance with the baseline and pessimistic

scenarios, the Company's information on the

expected sales volumes in 2021-2024 was taken into

account when modeling the results of Naftogaz

Ukrainy's operations.

Thus, in accordance with the Company's

expectations in 2021, natural gas sales are expected to

decrease from 17.6 to 15.2 billion cubic meters

compared to 2020 (by 2.4 billion cubic meters, or

13.7%). Sales of natural gas in 2022 - 2024 are

expected at about 15.5 billion cubic meters (Table 5).

Table 5: Net profit (loss) of NJSC Naftogaz of Ukraine (UAH million) (Information on fiscal risks and their impact on the

state budget in 2022, 2021).

Types of scenarios

2018 2019 2020 2021 2022 2023 2024

Baseline scenario 13 613 50 658 (18 002) 7 827 15 801 15 806 20 215

Pessimistic scenario 13 613 50 658 (18 002) (72) (3 065) (5 755) (7 086)

As shown in Fig. 5, in 2021 - 2024, according to

the baseline scenario, profitable activity of Naftogaz

Ukrainy is expected, according to the pessimistic

scenario - unprofitable activity of the Company.

Figure 5: Dynamics of change in net profit (loss) of NJSC Naftogaz of Ukraine under the conditions of the baseline and

pessimistic scenarios for 2018-2024.

The value of the debt ratio of NJSC Naftogaz of

Ukraine during 2018-2020 (at the level of 20-25%)

indicates the constant dependence of the Company on

borrowed capital, while in both scenarios in 2021-

2024 the value of this indicator is expected at the

same level (Table 6).

Also, both scenarios are expected to have a high

value of the current liquidity ratio of Naftogaz of

Ukraine in 2021-2024 (calculated as the ratio of

current assets to short-term (current) liabilities and

reflects the possibility of repaying short-term

liabilities from current assets).

Table 6: Debt ratio of NJSC Naftogaz of Ukraine for 2018-2024 (Information on fiscal risks and their impact on the state

budget in 2022 2021).

Types of scenarios 2018 2019 2020 2021 2022 2023 2024

Baseline scenario 19,5% 24,7% 23,1% 25,2% 24,0% 22,3% 18,5%

Pessimistic scenario 19,5% 24,7% 23,1% 24,0% 23,2% 22,0% 17,4%

This indicates the sufficiency of the Company’s

working capital to meet current obligations (Table 7).

Therefore, in the event of a pessimistic scenario, the

Company's unprofitable activity is expected in 2021-

2024, which will have a negative impact on the

volume of payments to the state budget of relevant

taxes and payments.

Table 7: Current liquidity ratio of Naftogaz of Ukraine for 2018-2024 (Information on fiscal risks and their impact on the

state budget in 2022, 2021).

Types of scenarios 2018 2019 2020 2021 2022 2023 2024

Baseline scenario 1,80 2,90 3,54 3,92 3,72 3,74 3,42

Pessimistic scenario 1,80 2,90 3,54 4,60 4,00 3,60 2,74

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In addition, according to the Company's

information provided to the Ministry of Finance

(Information on fiscal risks and their impact on the

state budget in 2022, 2021), In 2022-2024, the

Company plans to purchase imported gas at prices

well below gas prices, in particular in the European

market, which has recently tended to grow rapidly,

which may affect the Company's results of operations

and will require risk mitigation measures. in its

activities, in particular by optimizing costs.

Modeling of the expected financial results of

NJSC Naftogaz of Ukraine was carried out without

taking into account the consequences of the

implementation of the Law of Ukraine "On measures

aimed at overcoming the crisis and ensuring financial

stability in the natural gas market" (from 14.07.2021

№ 1639-IX).

However, the information on the expected

performance of Naftogaz of Ukraine in 2021-2024 is

estimated, does not take into account all possible

revenues and expenses of the Company, reflects the

possible trend of financial forecasts in different

scenarios and may deviate from the actual situation

due to in event scenarios and cannot be considered as

a guarantee of the occurrence of such events in the

future.

Therefore, taking into account the forecasts of

state companies on the volume and prices of sales of

products (goods, works, services) in 2020-2023;

forecast indicators of economic and social

development of Ukraine for 2021 - 2023; strategic

guidelines of Ukraine's energy strategy "for the

period up to 2035; norms of deductions to the state

budget of the relevant payments can be identified as

the main benchmarks for the oil transportation

company JSC "Ukrtransnafta", which must be

implemented under any development scenario in the

near future, in particular in 2021:

1. Support of the infrastructure of the NAFTA

Division for full-fledged remote operation in the state

of quarantine prevention (about 1,600 users),

including PrykarpatZakhidTrans (300 users).

2. Complete the integration of the infrastructure of

the central office of JSC Ukravtogaz into the

infrastructure of the NAFTA Division.

3. Implementation of PIMS (Oil Pipeline

Management and Integrity Management System),

IDOCHUB, Cisco Email Security Appliance (ESA),

McAfee Advanced Threat Defense, Port Security

projects.

4. Commissioning of fiber-optic lines in the area

of st. Luhova - data center in Kyiv.

5. Complete the implementation and work on the

project "ACS TP NPS Kurovichi for the

implementation of SCADA for the Company."

6. To start works on laying fiber-optic lines on the

section "VZ LVDS Kremenchuk-KP TM 53 km".

7. Put into commercial operation SVN (video

surveillance system) at the facilities "PZD Odessa",

"Snihurivka", "Pleshchivka", "Kurovychi".

8. Complete the RFID project.

9. Start work (1st stage according to the schedule)

on the JI project (leak detection system).

10. Implement a software package for email

protection.

11. Implement the GIS system (ARCGIS).

12. Deploy the centralized SCADA IT

infrastructure.

13. Complete the implementation of the first

infrastructure of the Ukravtogaz CNG filling stations

in the IT infrastructure of the Division.

The outlined strategic vectors of development

make it possible to assess the level of strategic

management of innovative development of oil

transportation companies for any scenario of their

development, in particular JSC "Ukrtransnafta".

Thus, the obtained results make it possible to

compare them with strategic guidelines and

determine the basic (3), stressful (2) and optimistic

(3) scenarios for the development of the oil

transportation company (Fig. 6).

Figure 6: Scenarios for the development of JSC

"Ukrtransnafta" for 2020-2025.

Source: author's development

We believe that under such conditions strategic

vectors of development of oil pipeline transport

enterprises are possible, including: increase in the

volume of oil transportation by main oil pipelines;

ensuring stability and permanence transportation of

oil both to Ukrainian refineries and in transit to

European consumers; diversifying the sources and

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391

routes of supplying oil to Ukraine and transiting

through Ukrainian territory in order to strengthen the

country's energy security; compliance with the

highest quality standards of oil transportation services

through the territory of Ukraine; ensuring the reliable

functioning and integrated development of the

national oil transportation system through the

implementation of promising investment projects

(Mykoliuk et al., 2020).

4 CONCLUSIONS

Thus, as practice shows, the analysis of economy and

society digitalization level as a whole in different

countries should be based on the initial data of the

ranking of global digital competitiveness, which took

place in 2015-2020. The comparative assessment of

countries in this ranking should be based on the

ability to perceive and effectively use digital

technologies as a change tooling regulatory practices,

business models and society as in general. Such

diagnostics makes it possible to single out Ukraine's

place among the digitized space in the time range.

Scenarios for the development of oil

transportation companies should be based on basic,

stressful and optimistic options for possible

developments. In addition, they should be based on

the forecasts of state companies on the volume and

prices of sales of products (goods, works, services) in

2020 - 2023; forecast indicators of economic and

social development of Ukraine for 2021 - 2023,

approved by the resolution of the Cabinet of Ministers

of Ukraine of 29.07.2020 №671 "On approval of the

Forecast of economic and social development of

Ukraine for 2021 - 2023"; Strategic Guidelines of the

Energy Strategy of Ukraine "for the period up to

2035, approved by the order of the Cabinet of

Ministers of Ukraine from 18.08.2017 р. № 605-р

«On approval of the Energy Strategy of Ukraine for

the period up to 2035 "Security, energy efficiency,

competitiveness"; norms of deductions to the state

budget of the corresponding payments. Also, the

strategic vectors of development of oil transportation

companies should be focused on domestic and

European consumers.

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