From left: Chevron’s General Manager for Europe Derek Magness, Minister of Ecology and Natural Resources of Ukraine Eduard Stavytsky and Chairman of the National Joint Stock Company Viktor Ponomarenko with (rear) US Ambassador to Ukraine Geoffrey Pyatt and President of Ukraine Viktor Yanukovych at the ceremony to sign the agreement in Kiev yesterday.
KIEV: Ukraine and US energy giant Chevron signed a $10bn shale gas deal yesterday that the ex-Soviet nation hopes could end its energy dependence on Russia by 2020.
The production-sharing agreement allows Chevron to explore the Olesky deposit in western Ukraine that Kiev estimates can hold 2.98 trillion cubic metres of gas.
The deal, worth the equivalent of 7¤.4bn, comes close on the heels of similar agreements which Ukraine has struck in the past year with the Anglo-Dutch group Shell and the US super-major ExxonMobil.
“The implementation of large-scale projects with Shell and Chevron ... will enable Ukraine to fully meet its natural gas need by 2020,” Ukrainian President Viktor Yanukovych said moments before ye4sterday’s signing ceremony.
Ukrainian Prime Minister Mykola Azarov has estimated the deal’s value at $10bn (¤7.4bn).
The Chevron agreement comes as part of a drive by Ukraine to diversify energy sources at a time when it is seeking to cement closer relations with the European Union at Russia’s expense.
Last week, Russia slapped Ukraine with a gas bill of nearly $1bn in apparent anger at Kiev’s bid to strike an EU free trade and political association agreement in Vilnius at the end of the month.
The EU deal’s signature is seen as a first step in Ukraine’s eventual membership in the 28-nation bloc. But Moscow wants to see Ukraine join a Russian-led customs union that already includes Belarus and Kazakhstan.
Russia’s energy giant Gazprom has denied presenting the massive gas bill to Ukraine as part of a strategy to force Kiev to reconsider the EU pact.
Gazprom said yesterday that so far Ukraine had paid less than a tenth of the money in instalments it began meting out only after Russia issued a warning about the debt payment last week.
Ukraine has been moving swiftly to explore shale gas deposits that it lacks the technology to develop but which it views as a plank of its energy strategy in the years to come.
The nation of 45 million people consumed about 50 billion cubic metres of natural gas last year.
It imported 33 billion cubic metres of that volume from Russia and set the itself the target of slimming that figure down by five billion cubic metres this year.
Its foreign partnerships strategy has seen Ukraine strike a $10bn production-sharing agreement with Shell in January to explore shale gas at the Yuzovska deposit in the eastern Donetsk region that may hold up to three trillion cubic metres of gas.
Ukraine in September also reached a production-sharing agreement with a consortium led by ExxonMobil and Shell to extract natural gas on the Skifski site off Ukraine’s Black Sea coast.
That site alone is expected to provide 8 to 10 billion cubic metres of natural gas per year.
But analysts are sceptical about the spate of agreements being able to make Ukraine self-sufficient by 2020 as Yanukovych wants. Dmytro Marunchin of Kiev’s Energy Studies Institute pointed out that Ukraine and its various partners have still not dug a single exploration well to determine the actual size of the shale gas reserves. “This is a political statement,” he said of the president’s promise.
Volodymyr Omelchenko of the Razumkov Centre for political studies added that he did not expect shale gas production to start on a commercial scale in Ukraine until 2022.
“I do not see how we can reach shale gas volumes that could make us comepletely self-sufficient before 2025,” Omelchenko said.AFP
