25 January 2013 16:24 [Source: ICIS news]
LONDON (ICIS)--Shell has signed a production sharing agreement with the government of Ukraine regarding the exploration, development and production of shale gas in the country, the Anglo-Dutch energy major confirmed on Friday.
Estimated to be worth up to $10bn (€7.5bn) according to media reports, the agreement concerns the 7,800 square km Yuzivska gas field site, situated in eastern Ukraine.
The agreement was signed on 24 January by representatives of Shell Exploration, the Ukrainian State, and governmental subsidiaries Production Ukraine Investments and Nadra Yuzivska at the World Economic Forum meeting in Davos, Switzerland.
Shell and the Ukrainian government will each hold a 50% stake in the agreement, with Shell to act as the operator responsible for the project and all related activities. The deal, which potentially stands to dramatically increase Ukraine’s energy independence from Russia, will stand for 50 years, Shell said.
The first phase of the partnership involves the drilling of fifteen wells in the area, to allow the appraisal of the shale gas potential of the site.
“If successful, the Yuzivska project will allow Ukraine to significantly increase its domestic production,” said Nadra Yuviska director Sergii Golovin.
($1 = €0.75)
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