Ukraine announced natural gas deals with Chevron Corp (CVX:US) and Exxon Mobil Corp (XOM:US) in a push to cut costs by two-thirds and reduce its dependence on Russia.
The Ukrainian government signed a production-sharing agreement with Chevron for extraction of shale gas in the Oleske field, Energy Minister Eduard Stavytskyi said today at a press conference in Kiev. Another production-sharing agreement with an Exxon-led group for exploring the Skifska field in the Black Sea may follow by the end of the month, he said.
Ukraine, dependent on expensive Russian gas imports for more than 60 percent of its needs, is accelerating efforts to diversify supply. Royal Dutch Shell Plc (RDSA) signed a production-sharing agreement in January to develop shale in the Yuzivska field in the eastern part of the country.
“The cost of gas production will be at least three times lower than what Ukraine is paying for the imports,” Stavytskyi told journalists during the press briefing.
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It will be quite a while before these go online, I suspect, but I have to wonder how much of this will be able to meet Ukrainian demand and how much will this allow Ukraine to extinguish the Gas Wars with Russia.
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