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Multinational Oil and Gas Company Sanctioned to Start Operations in Ukraine



 Multinational Oil and Gas Company Sanctioned to Start Operations in Ukraine

  PR Newswire

  KYIV, Ukraine, September 13, 2013

KYIV, Ukraine, September 13, 2013 /PRNewswire/ --

Royal Dutch Shell signed an agreement with the Ukrainian government, which
gives green light to the company's operation in Yuzivske gas field. The
document was signed within the framework of the 2012 Agreement on distribution
of hydrocarbons extracted from the Yuzivske field. Notably, along with
conventional natural gas, the company plans to extract both shale gas, and
tight gas.

"This Agreement grants [Shell] full permission to launch investment and
operation procedures at the Yuzivske field. Starting today, the work of the
Royal Dutch Shell is commencing in Ukraine de jure and de facto," commented
Ukraine's Minister of Energy and Coal Industry Eduard Stavytskyi at the
signing.

The Minister highlighted that according to the product distribution agreement,
during the first stage the Royal Dutch Shell will invest USD 500 million into
the geological exploration of the area. The company's overall investment into
the exploration and infrastructure development of Yuzivske are estimated at
USD 10 billion, reads kmu.gov.ua.

Eduard Stavystkyi reinforced that depending on the actual amounts of extracted
gas, 30 to 60 percent of the developed product would belong to the country. At
the same time the shares of the participating investors - the Royal Dutch
Shell and Ukraine's Nadra Yuzivska - will constitute two equal parts.

The gas extraction is expected to begin in 2015. According to the estimation
provided by Shell, Yuzivske field contains about 3-3.5 trillion cubic meters
of gas deposits.

In May 2012 Royal Dutch Shell received the right to develop Ukrainian shale
gas field Yuzivske in Eastern Ukraine (Kharkiv and Donetsk oblasts). In June
2012 Stavytskyi stated that Shell decided to provide Ukrainian government with
a bonus of USD 400 million - on top of the share in the profits from the
hydrocarbon production.

At the same time Chevron obtained the right to develop Ukrainian shale gas
field Oleske (western Ukraine, Lviv oblast). Yuzivske and Oleske are expected
to provide Ukraine with up to ten percent of domestically consumed gas by
2020.

Moreover, in August 2012, Shell together with ExxonMobil, Romanian OMV Petrom,
and Ukrainian state company Nadra received joint rights to develop underwater
deposits at the deep marine gas field Skifske in the Black Sea.

Contact: For more information, please contact Maryna Khorunzha +380443324784
news@wnu-ukraine.com, Project Manager at Worldwide News Ukraine.
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