45 Bln Cubic Meters of Gas Production Is Realistic for Ukraine, ExxonMobil

KYIV, Ukraine, July 12, 2013 /PRNewswire/ --

According to the ExxonMobil's estimation of Ukrainian offshore and continental gas reserves, the country may achieve annual gas production of 45 billion cubic meters by 2020, stated Kevin Biddle, the company's European exploration director, in his interview with kommersant.ua. He explained interest of ExxonMobil in developing business in Ukraine by its oil, gas, shale gas, and coalbed methane reserves, as well as positive forecast for the extraction price.

"This allows us to convince the shareholders that investment in this country can generate return," said Biddle. Should ExxonMobil sign the production sharing agreement with the Ukrainian government, the initial investment will amount to USD 325 million. The investment may reach billions of dollars in case the company finds gas and oil, added Biddle.

Currently, ExxonMobil is preparing to explore deep marine gas field Skifske in the Black Sea. So far, the company has the data of two-dimensional exploration of the field and will be able to evaluate deposits after the data of three-dimensional exploration is available. In August 2012, Shell, ExxonMobil, Romanian OMV Petrom, and Ukrainian state company Nadra received joint rights to develop underwater deposits at the site.

Ukraine's Skifske gas field is adjacent to Romanian Neptun block, developed by ExxonMobil and OMV subsidiary Petrom. The deposits at Neptun's Domino-1 field are estimated at 42 to 84 billion cubic metres. Ukraine has as high a potential as Romania does, reckoned Biddle.

Ukraine is putting effort into developing domestic energy resources in order to increase the country's energy security. On July 11, 2013, Ukraine's state gas managing company Naftogaz announced the discovery of a large oil field in the eastern part of the country. The minimum deposits are estimated at 13 million tons.

In May 2012, Royal Dutch Shell and Chevron obtained the right to develop Ukrainian shale gas fields Yuzivske (eastern Ukraine, Donetsk oblast) and Oleske (western Ukraine, Lviv oblast), respectively. The fields are expected to provide Ukraine with up to ten percent of domestically consumed natural gas by 2020.

Ukraine's 2012 annual gas consumption was 55.6 billion cubic meters, according to Dragon Capital. In September 2012, PM Mykola Azarov stated that Ukrainian domestic gas consumption would be cut in two by 2013.

SOURCE Worldwide News Ukraine