Ukraine plans to sign an operating agreement with Europe’s largest oil company Royal Dutch Shell on Friday, September 13, to develop shale gas, Prime Minister Nikolai Azarov said on Friday.
The deal with Royal Dutch Shell will be signed during the Ukrainian prime minister’s visit to the Netherlands.
“The document will kick off the transnational corporation’s practical gas development and exploration in Ukraine,” Azarov said adding that it would give a signal for attracting strategic investors into Ukraine’s oil and gas industry.
Ukrainian Ecology and Natural Resources Minister Oleg Proskuryakov told reporters several days ago that “the agreement will regulate relations between investors - Royal Dutch Shell and Ukraine’s Nadra Yuzovskaya.” “At the beginning of next year we plan to drill the first well,” he said.
Royal Dutch Shell that won a tender to develop a shale gas deposit in Ukraine’s Donetsk and Kharkov regions promised to invest around $410 million into geological surveying at the project’s first stage. These investments will be realized within three-five years.
According to an optimistic scenario, the Yuzov shale gas field may produce up to 20 billion cubic meters a year, which corresponds to Ukraine’s current gas output.
The Ukrainian government’s press service said investments into the field at the stage of commercial development would total $3.75 billion. Ukraine plans to start drilling prospecting holes this year. The Yuzov field’s reserves are estimated at 4 trillion cubic meters.