The establishment of NADRA GROUP was not accidental but rather a logical step, given the important role and place of geology in the State. The company has inherited and developed the vast potential of Ukraine's geological industry, which has evolved over centuries. It would be difficult to comprehend the success story of NADRA GROUP without an understanding of the history of the industry.
At the turn of the nineteenth and twentieth centuries, the territory of modern Ukraine was divided between the Russian and Austro-Hungarian Empires. The western part, which was part of Austria-Hungary, became the birthplace of the world's oil industry. In Lviv, the oil refining process was invented, and the first kerosene lamp was designed by Jan Zech and Ignacy Łukasiewicz, and executed by Adam Bratkowski, a local tinsmith. These inventions triggered a real "household revolution" by replacing candles and oil lamps with kerosene lighting. They also revealed the global need for a powerful oil industry. Later, near Boryslav, oil production began on an industrial scale, and numerous oil fields emerged.
In 1877, I. Łukasiewicz initiated the First World Petroleum Congress, which took place in Lviv. Later, in 1882, the world's first professional magazine covering oil industry issues was published in Lviv, titled "Hirnyk" (the Ukrainian word for "Miner").
Meanwhile, the industrial development in the eastern and southern parts of Ukraine, which were part of the Russian Empire, was primarily based on the natural resources of the Kryvyi Rih and Donbass areas. The region's coal, iron ore, and metallurgical and machine-building industries grew, and a railway network was constructed. The famous painting "Three Princesses of the Underworld" by artist Viktor Vasnetsov symbolized the industrial revolution during that period and the underground riches of Donbass.
The three princesses, Gold, Copper, and Coal, were associated with the minerals of Donbass. Each princess represented a different mineral. Copper was the oldest, followed by Gold, and Coal was the youngest. This order symbolized the way in which mankind has historically utilized and developed natural resources, beginning with copper, then moving on to gold, and finally, coal.
The First World War resulted in the collapse of the Austro-Hungarian and Russian Empires, providing Ukraine with an opportunity to develop independently. In 1916, the Kharkiv Geological Society was established, and it was succeeded by the Ukrainian Association of Geologists (UAG). In 1918, the Ukrainian Geological Committee was founded, with V.I. Luchytsky as its first director. This committee served as the foundation for the independent Ukrainian geological survey. However, Ukraine was soon transformed into the Ukrainian Soviet Socialist Republic and became a part of the USSR.
After that, the Ukrainian geological industry, mining, and industrial enterprises were integrated into a single economic complex of the Soviet Union for a long period. Although mining and geological enterprises had some autonomy in the Ukrainian SSR, being subordinated to the republican ministries and departments, they were ultimately managed from Moscow. The seven- and five-year economic development plans were created and approved in Moscow, and the state budgets were formed for the Soviet Union and the union republics. Enterprises engaged in strategic areas for the USSR, such as deposits of radioactive elements, were directly subordinated to Moscow, such as the Kirovgeologiya Association of Kyiv. Geological science was concentrated in state branch research institutes, institutes of the Academy of Sciences of the Ukrainian SSR, and higher educational institutions. All enterprises, institutions, and establishments were state-owned, and their financing was centralized under the so-called planned economy.
The aforementioned structure had several advantages for studying the subsoil, as it required strict adherence to the phases and stages of exploration work. As a result, per-sheet geological mapping was conducted at a scale of 1:200,000 throughout the Ukrainian SSR, and at a scale of 1:50,000 to 1:25,000 within the Ukrainian Shield, the Donetsk Basin, the Carpathians, and the mountain Crimea. Exploration and prospecting work were carried out, resulting in the discovery and exploration of a large number of deposits containing various minerals. The relevant reserves were included in the state balance.
An important result of geological surveying was the discovery of the oil and gas potential of the Dnieper-Donets basin in 1936 by F.O. Lysenko. This marked the beginning of the discovery of large oil and gas fields after World War II. In 1950, the Shebelynka gas condensate field, one of the largest in Europe, was discovered in the basin with 650 billion cubic meters of initial gas reserves. After the operation of this and other deposits began in 1975, annual gas production reached a record high of 68 billion cubic meters. The construction of large oil and gas transportation networks passing through Ukraine's territory, such as the Druzhba Oil Pipeline, the Soyuz, Progress, Urengoy-Pomary-Uzhhorod Gas Pipelines, and the Underground Gas Storage System (UGS), made Ukraine a major transit country. This contributed to the construction of gas pipelines of local importance and the country's further large-scale gasification. These events were unique and epoch-making, not only for Ukraine but also for the entire former Soviet Union and Europe. It was from the territory of Ukraine that the world's first interstate natural gas supplies were launched in 1945, from the Dashavske and Oparske gas fields to Poland.
By the end of the twentieth century, Ukraine had discovered over 8,000 deposits containing 97 types of minerals. This led to the emergence of state exploration enterprises, factories producing tools and equipment, scientific and research institutes, as well as higher and secondary educational institutions. Thousands of Ukrainian specialists worked in Africa, Asia, and Latin America.
However, the planned economy based on state ownership proved to be inefficient and had a detrimental impact on the environment. The pursuit of meeting targets led to a decrease in the quality and efficiency of exploration work, resulting in unreasonable costs. It is worth noting that the main focus during drilling was not on its quality and geological results, but on the number of drilled running meters needed to meet the targets. The same applied to other types of exploration work, such as seismic exploration.
The Soviet leadership showed disregard or almost complete ignorance of the environmental consequences of mineral exploration and exploitation. For example, underground nuclear explosions were carried out in 1972 at the West Khrestishche gas condensate field (Kharkiv region) to eliminate an open fountain and in 1979 at the Yunkom Coal Mine in the Donets Basin (Donetsk region) to prevent methane emissions. Sulfur mining by underground smelting at the Rozdol deposit in Prykarpattia (Ciscarpathia) caused severe environmental damage. Military facilities in the cities of Bila Tserkva, Uzyn, Pryluky, Poltava, and Mykolayiv contaminated soils and groundwater uncontrollably with oil products, resulting in the formation of technogenic deposits. The giant quarry piles and heaps of the Donets and Lviv-Volyn Coal Basins serve as reminders of the Soviet era and planned economy.
The Soviet Union and its union republics had an inefficient planned economy, which eventually forced the union leadership to initiate economic reforms. However, it was done too late and piecemeal. Additionally, the Chernobyl Nuclear Power Plant accident in 1986 demonstrated the impracticality of the centralized management system. The unsuccessful implementation of perestroika resulted in an economic collapse that triggered the dissolution of the Soviet Union, leading to the restoration of independent states, including Ukraine. The young Ukrainian state embarked on a painful transition from a planned to a market economy. State funding was significantly reduced, exploration companies were shut down, and factories producing industrial equipment lost orders, while tens of thousands of highly qualified specialists lost their jobs.
The most concerning trends during this period were the disintegration of production teams and the decline of once-powerful industrial and scientific schools. With reduced exploration work, domestic mineral extraction also decreased, making Ukraine's energy dependence more apparent. Numerous industrial enterprises faced the brink of bankruptcy due to outdated stationary assets, engineering developments, high energy consumption, and low-quality products that were uncompetitive in foreign markets. The only viable solution was the privatization of former state-owned enterprises and the establishment of non-state-owned companies. The early 1990s were a favourable period for these changes.
On April 22, 1991, a group of young Ukrainian geologists founded the first enterprise of NADRA GROUP with the main goal of establishing a robust private service geological holding during the transition of the Ukrainian geological exploration industry from a planned to a market economic system.
After studying the organizational structure, forms, and activities of geological enterprises in developed countries, the company founders realized that the socialist model of geological production in Ukraine conflicted with the basic principles of a market economy. In the new economic conditions, most state-owned enterprises would not only require fundamental changes in their activities, but also expect the complete liquidation of most of them.
With this in mind, the founders of the company developed a concept and strategy for establishing NADRA GROUP, which would enable it to carry on the best traditions of Ukrainian geology in a new competitive environment.
In developed countries, it is customary for the state to oversee regional geological surveys and the search for potential sites for energy, mineral, and water (groundwater) resource exploration and production. However, this type of market held little promise for NADRA GROUP, as state-owned enterprises that continued this same activity persisted even after Ukraine's economy underwent restructuring.
The state-owned exploration enterprises in Ukraine were essentially service companies that conducted exploration of mineral resources and then transferred fully explored deposits to the relevant state-owned mining companies for their operation.
In the new market conditions, this model of geological production was declining, as exploration of metallic and non-metallic natural resources was typically being carried out by sector-specific production companies. Service companies, on the other hand, were providing these companies with a minimal scope of logging and drilling services.
In this context, NADRA GROUP has primarily focused on managing investment projects for the exploration and production of metallic and non-metallic minerals using funds from investors. The management of investor projects encompasses all stages of the project, including initiation, planning, implementation, monitoring and control, and completion, whether for the entire project or for individual stages.
Given that numerous state, municipal, and private enterprises are involved in groundwater exploration and production, NADRA GROUP's focus in these areas was primarily on preserving the quality of surface and groundwater during oil and gas exploration and production processes. Thus, the main direction of NADRA GROUP's activity was determined, namely the creation of a high-tech service company to provide services to Ukrainian and foreign oil and gas production companies.