Quantcast
Last updated on April 17, 2014 at 14:57 EDT

Exxon Led Consortium Wins Access to Ukraine’s Oil and Gas Resources

August 15, 2012

KYIV, Ukraine, August 15, 2012 /PRNewswire/ –

Four companies won the right to develop oil and gas reserves at the Ukrainian deep
marine shelf field Scythian under the Black Sea, according to Eduard Stavytskyi, Ukrainian
Minister for Ecology and Natural Resources. American ExxonMobil, Dutch-British Royal Dutch
Shell, Romanian OMV Petrom, and Ukrainian state company Nadra will unlock the underwater
deposits.

Scythian field is “massive in size” (16,698 square kilometers) and “adjacent and
geologically similar to where ExxonMobil and OMV Petrom are exploring off Romania’s
coast,” The Financial Times quotes an unnamed Ukrainian government official. The Ukrainian
government chose the joint bid by four companies over the bid by Russia’s oil giant
Lukoil.

“Bringing in the energy majors is a paradigm shift for Ukraine’s energy security and
investment climate. No deals of this magnitude have yet been inked in this country,” said
the president of the American Chamber of Commerce in Ukraine Jorge Zukoski in his
interview to the British press.

Group, led by Exxon, will pay at least USD 300 million for the right to sign a 50 year
production agreement with the Ukrainian government within ten days after signing. Their
bid also stipulates investing USD 400 million during the initial phase of the exploration.
This is double of what the Ukrainian government was initially aiming for.

The commercial production at Scythian oil and gas field may start in six to eight
years and reach three to four billion cubic meters of gas annually, informs the FT.

Ukraine is estimated to possess the fourth-largest shale gas reserves in Europe. The
planned exploration projects in Ukraine are an attempt of the country to rid itself of
energy dependency on Russia, according to the British paper.

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

Moreover, Ukraine began reforming its inefficient energy system by adopting the State
Program on Energy Efficiency 2010-2015. Ukraine aims at reduction of domestic energy
consumption through increasing energy efficiency, as well as developing domestic gas
reserves, introducing green energy production technology, and diversifying gas import.

SOURCE Worldwide News Ukraine


Source: PR Newswire