Ukraine, Shell ink $ 10 bn shale gas deal


Published — Friday 25 January 2013

Last update 25 January 2013 2:27 am

| نسخة PDF Print News | A A

DAVOS: Ukraine and the global oil giant Royal Dutch Shell signed yesterday a $ 10 billion shale gas production sharing agreement aimed at helping the ex-Soviet nation ease its dependence on Russia.
Ukrainian President Viktor Yanukovych and Shell CEO Peter Voser signed the deal on the sidelines of the World Economic Forum in Davos, a gathering of the world's business and political elite.
Earlier yesterday, Ukrainian Energy Minister Eduard Stavitsky put the value of the deal at $ 10 billion.
Yanukovych said the deal was "only the beginning" and vowed: "From now on we will also be able to find a flexible method of co-operation that will add value to both our countries' economies."
The prime minister of The Netherlands, where Shell is based, said he wished "every success" to the new venture and praised the firm.
"Despite the fact it is a company that has been established a long time ago, it is still at the forefront of entrepreneurship," Mark Rutte said.
The Ukrainian government estimates the eastern Donetsk location may hold three trillion cubic meters (100 trillion cubic feet) of natural gas — enough to last the nation of 46 million people 70 years at current consumption rates.
The Shell deal comes amid an upsurge of foreign interest in Ukrainian shale gas — tapped by a controversial process known as fracking — after the industry took off in North America.
Some forecasts suggest that Ukraine alongside countries such as France and Poland may hold some of Europe's largest shale rock deposits.
Voser said it was a "very important day for Shell" and acknowledged it was a "big step" for his firm.
Stavitsky said earlier Ukraine will be able to completely break its energy dependence on Russia should shale gas production proceed as envisioned under the deal.
"If we follow the optimistic scenario, our existing (energy) deficit problems will be solved," the energy minister said.
Ukraine lacks the technology to reach the deep-buried shale rock holding the gas and continues to rely heavily on gas imports from its eastern neighbor Russia.
It hopes to renegotiate the terms of a 10-year gas deal it signed in 2009 with Russia that sets high purchase prices.
But Moscow has set Ukraine's membership in a loose Moscow-led trade body as a precondition and also wants partial ownership of Ukraine's gas pipeline and distribution network.
No deal has been reached despite more than two years of talks.

What's happening around Saudi Arabia

JEDDAH: An African expat woman is being investigated for torturing her baby to death by pouring boiling water on her. The motive behind the vicious attack is unknown.The Board of Investigation and Prosecution in Jeddah has charged the woman with semi...
RIYADH: Over five million Overseas Filipinos Workers (OFWs), including more than one million in Saudi Arabia, observed “zero remittance day” on Friday, in protest against the random checking of boxes sent by them to their families back home by the Cu...
JEDDAH: Security authorities have arrested 45 people from different parts of the Kingdom for Daesh links in the past 10 days. Forty of the suspects, accused of terrorism, are Saudis. Others are 2 Yemenis, an Egyptian, a Palestinian, and a national of...
RIYADH: The Ministry of Health announced on Friday that two more people were infected with the Middle East Respiratory Syndrome (MERS) coronavirus. While no deaths were announced, the virus has already killed 26 people in just two weeks, from Aug. 16...
RIYADH: The government and courts have issued 35,010 penalties against citizens and expatriates for violating the country’s residency laws including fines and jail terms.Citizens and expatriates across the Kingdom were penalized for transporting, har...
JEDDAH: As international schools in the city gear up for the new academic session, some parents have requested that schools improve the quality of their classes in Islamic studies. Although the Ministry of Education has decreed that all international...

Stay Connected