Shell and Chevron to develop two shale gas fields in Ukraine

By 2020, Ukraine plans to extract four to five billion cubic meters of shale gas annually.

Ukraine's president, Viktor Yanukovych (L), and Royal Dutch Shell's CEO, Peter Voser, during a meeting in September 2011. Credit: Getty Images

Royal Dutch Shell and Chevron Corporation have received permission to develop two shale gas fields in Yuzivske and Oleske, Ukraine, with an estimated investment of at least $370m.

Industrial extraction of gas at the sites will begin in 2018-2019. The fields are expected to provide Ukraine with up to 10 per cent of domestically consumed natural gas by 2020.

The Ukrainian state geological service estimates the amount of conventional and unconventional (as well as condensed) gas deposits at the Oleske field at three trillion cubic metres. As for the Yuzivske field, it may offer up to four trillion cubic metres of gas.

In February, Ukraine announced the public bid for the development of the prospective seven trillion cubic metres of gas in the fields. Exxon Mobil, Shell and TNK-BP placed their bids for the right to develop the Yuzivske field in eastern Ukraine (Donetsk oblast), while Chevron and Eni competed for the right to establish gas production at Oleske in the Lviv region.

The US energy information administration assessed the total of Ukrainian gas resources at 1.2 trillion cubic metres.

Yuriy Boyko, the Ukrainian minister of energy and coal industry, stated earlier that the country planned to set up domestic shale gas extraction in five years (it took the US 20 years to accomplish a similar feat). By 2020, Ukraine plans to extract four to five billion cubic metres of shale gas annually.