You're reading: Ukraine inches closer to signing second shale gas exploration agreement

Ukraine has inched closer to signing a product sharing agreement with American giant Chevron after the local city councils of Lviv and Ivano-Frankivsk in western Ukraine received the deal's final text and set tentative voting dates for its approval, Energy Minister Eduard Stavitsky said on June 13.

The finalized version of the product sharing agreement with Chevron was handed over to regional authorities on June 12.

The local councils convene on June 18 and 21, and might consider voting for the agreement on these dates. Their vote is the last stage of approval before it can be signed by central government officials and Chevron, who will form a joint venture to explore gas from shale in Oleska field in western Ukraine.

Ukraine held two international tenders in 2012 for exploration of shale gas, and one for exploration of natural gas offshore, which were won by international giants Royal Dutch Shell, Chevron and ExxonMobil.

Shell signed its product sharing agreement in January, and Chevron might sign the second of such landmark deals that can potentially bring billions of investment to Ukraine and decrease the nation’s dependency on expensive Russian natural gas supplies.

Oleska field in western Ukraine covers an area of nearly 6,500 square kilometers and is thought to have between 0.8 and 1.5 trillion cubic meters of reserves of shale gas, according to various estimates.

Stavitsky said the government has also “moved on”  finalizing the agreement with ExxonMobil, which last year won a tender to sign a product sharing agreement for offshore exploration of natural gas at Skifska field. Staviltsky said the government hopes this agreement will be signed in July-early August.

Ukraine is also planning to hold two more tenders for product sharing agreements this year, according to  Oleg Proskuriakov, minister for natural resources. One of them, Slobozhanska field in Kharkiv regions, borders Yuzivska field that Shell plans to develop. The other one is Foros offshore field.

Proskuriakov said the tenders will be held after the current pending product sharing agreements are signed.