(Yicai Global) Aug. 1 -- Zhongman Petroleum And Natural Gas Group, better known as ZPEC, has won a USD21 million contract to drill in two Ukrainian cities as it makes its first move into the European country.

ZPEC signed a three-year deal with UGV to drill wells in Poltava and Kharkiv, Ukraine's second-biggest city, the Shanghai-based firm said in a statement. The contract is worth around 8.1 percent of ZPEC's 2017 revenue.

UGV is a subsidiary of Ukraine's national oil and gas company Naftogaz, which is hoping to borrow USD100 million from the European Bank for Reconstruction and Development as part of a USD250 million revolving loan for the purchase of natural gas. The lender is scheduled to decide whether or not to grant the loan next month.

Founded in 2003, ZPEC is a privately-owned drilling contractor and petroleum equipment maker which supplies China's big three state-owned oil companies and Royal Dutch Shell, and has units in major oil producing areas like Dubai and Tehran. Once settled in Ukraine, the firm plans to improve market structure and lay foundations to explore the rest of Eastern Europe.

Editor: James Boynton