Shell Ukraine Regards Improvement of Investment Climate in the Country

Feb 13, 2013, 17:41 ET from Worldwide News Ukraine

KYIV, Ukraine, February 13, 2013 /PRNewswire/ --

"I believe that Ukraine fills me with optimism," said Graham Tiley, Shell Ukraine Country Chairman during his press conference in Donetsk on Tuesday, February 12, 2013, reports Ukrinform. During the event he also reiterated his belief that investment climate in Ukraine was improving.

"I'm very pleased to see such a fair and transparent tender as the one that we won," said Tiley at the press conference. Notably, Shell won the right to explore gas in Yuzivske gas field in eastern Ukraine in May 2012.

Shell Ukraine senior official reminded that during the first stage of exploration the company will drill 15 wells spending about USD 200 million. In addition, starting in 2013 Shell will annually invest in Ukrainian social projects approximately USD 2 million.

Reportedly, in January 2013, Ukrainian government and the Royal Dutch Shell signed the production sharing agreement aimed at increasing domestic shale gas production, creating jobs, lifting the economy, boosting state budget revenue, and promoting investment to Ukraine. The 50-year contract was "the biggest contract yet to tap shale gas in Europe," commented Reuters at the time on Ukraine-Shell agreement, noting that the USD 10 billion deal is a significant step on the road to energy independence from Russia.

Recently, Ukraine has been extensively covered by the international media with respect to its investment potential. The Financial Times special report article focusing on Ukrainian energy, published in September 2012, highlighted opening up of the "underinvested but promising" energy sector to the international companies. Author Roman Olearchyk noted the irony of the effect that high Russian gas prices caused - they "helped to change Ukraine's investment policy for the better".

Neil Buckley of Financial Times believes that the deal with Shell could promote investment to Ukraine, reduce energy dependence from the Russian gas, and push the country closer toward integration with the EU. This would "alter the investment environment" in Ukraine, he said.

In August 2012, Shell, ExxonMobil, Romanian OMV Petrom, and Ukrainian state company Nadra received joint rights to develop underwater deposits at Ukrainian deep marine shelf field under the Black Sea. Ukraine's shale gas reserves are projected to be the third largest deposits in Europe containing 1.2 trillion cubic meters of gas according to the U.S. estimates.

SOURCE Worldwide News Ukraine