Shell to Extract Shale Gas in Ukraine

KYIV, Ukraine, September 2, 2011 /PRNewswire/ --

Today the Royal Dutch Shell plc. signed a new version of the cooperation agreement with Ukraine. The agreement covers Shell's involvement in shale gas extraction and diversification of energy resources mining in Ukraine. Later today the CEO of Shell Peter Voser met with the President of Ukraine Viktor Yanukovych to discuss the agreement and future cooperation.

The agreement that was signed today between the Ukrainian public company Ukrgazvydobuvannia and Shell plc. stipulates the future cooperation in the area of exploration and extraction of hydrocarbons in Dnipro-Donetsk basin, Central Ukraine. According to the agreement Ukraine will be able to take advantage of modern technology and start developing unutilized gas resources, including the unconventional ones.  The parties agreed that Shell is going to invest up to USD 800 million into the shale gas development project, according to RBC. The first stage of the project is estimated at USD 200 million with USD 600 million to follow.

After the meeting with the president of Ukraine, CEO of Shell Peter Voser stated that Shell was interested in the cooperation and confirmed the company's eagerness to provide expertise as well as the technology, to intensify and diversify mining of energy resources in Ukraine.

The initial agreement between Ukrgazvydobuvannia and Shell was signed in 2007 and stipulated the first stage of developing of the Dnipro-Donetsk trench. The potential of the area was estimated at 400 billion cubic meters of gas. Notably, around 80 percent of hydrocarbon extraction in Ukraine is conducted in Dnipro-Donetsk trench.

In 2010, the press center of the Ministry of Environment stated that the territory of Ukraine enjoys the biggest shale gas supply in the world. However, the volume of the substance was not specified. Since then a number of international companies has expressed their desire to explore and develop unconventional gas resources in Ukraine. Thus, on 9 November 2010, Canadian East West Petroleum Cooperation (EWP) and Kuwait Energy Company verified their readiness to yield shale gas in Ukraine, as stated in Toronto stock exchange announcement. Prior to that, in June of the last year, a Polish company Kulczyk Oil completed the purchase of 70 percent of the Ukrainian gas-extracting company KUB-gas. This proves the ever-growing international interest towards Ukraine's natural resources.

SOURCE Worldwide News Ukraine