Industrial gas production at the Yuzovska (Kharkiv and Donetsk regions) and Oleske (Lviv and Ivano-Frankivsk regions) fields is to begin in 2017, Ukrainian Environment and Natural Resources Minister Eduard Stavytsky said at a press conference at Interfax-Ukraine in Kyiv on May 16.
"Considering all the procedures, by the end of the year it will be realistic to sign a production sharing agreement with Shell and Chevron [the winners of the tenders for Yuzovska and Oleske, respectively]. Drilling at the Yuzovska field should begin next year, and testing-industrial development – in 2015. At the Oleske fieldwork will likely begin in 2014, and testing-industrial development – in 2016. Full industrial development [at both deposits] will be in 2017," Stavytsky said.
The basic scenario is that Ukraine will be able to produce 15 billion cubic meters (bcm) of gas a year at the two fields, he said.
"The optimistic scenario foresees the production of around 50 bcm of gas in the peak years. Per our calculations, somewhere in 2020 we will be supplying all our gas needs," the minister said.
Shell and Chevron intend to drill around 5,000 wells at the two fields during the geological prospecting stage, which will exceed the government’s original expectations, Stavytsky said.
"The winners’ investment proposals were twice as good as the figures built into the cabinet of ministers’ resolution [of November 30, which laid out the PSA conditions for the two fields," he said. According to that resolution, the minimum amount of investment required by an investor for the geological prospecting of Yuzovska was Hr 1.6 billion, and for Oleske Hr 1.3 billion.
"These amounts were at least twice as much in the winners’ tender-proposals," Stavytsky said.
Shell and Chevron’s proposal involve the government stake in recovered product at more than 30%, where the required minimum was 16.5%.
Secretary for the interagency PSA commission Volodymyr Ihnaschenko said that serious economic sanctions for the non-fulfillment or non-timely fulfillment of obligations would be built into the agreements with Shell and Chevron.
On February 23, Ukraine announced PSA tenders for hydrocarbons to be produced at the Yuzovska and Oleske fields. A few days prior to that, SPK GeoService was announced Nadra Ukrainy’s partner to create joint ventures that will serve as one of the sides in future PSAs.
In the development of the Yuzovska field, the projected resources of which are estimated at 4.054 trillion cubic meters of various types of gas, there are plans to raise at least Hr 1.6 billion in investment at the geological study stage and Hr 30 billion at the industrial development stage.
For Oleske, the forecast resources of which are estimated at 2.98 trillion cu m of shale gas, there are plans to raise at least Hr 1.3 billion in investment at the geological study stage and Hr 25 billion at the industrial development stage.
