Ukraine Seeks Chevron Shale Deal by May After Objections Dropped

Ukraine is seeking to sign a shale gas production-sharing agreement with Chevron Corp. (CVX) within two months after winning over local opposition to drilling for the fuel as the nation speeds up efforts to cut reliance on Russia.

Local authorities in regions where Chevron plans to start drilling have withdrawn objections, on environmental grounds, to the development, Ecology and Natural Resources Minister Oleh Proskuryakov told a conference in Ukraine’s capital of Kiev. Chevron may start drilling at the field, in the western regions of Lviv and Ivano-Frankivsk, by the year-end, Proskuryakov said.

Ukraine, dependent on Russian natural-gas imports for more than 60 percent of its needs, is seeking to diversify supplies. Royal Dutch Shell Plc signed a production-sharing agreement to develop shale last month after Chevron won a license for the Oleske field in 2012. The government plans to sign an extraction deal for the Skifska field on the Black Sea with an Exxon Mobil Corp.-led group within six months, Proskuryakov said.

Ukraine has been trying to renegotiate a gas contract with Russia since 2010, saying it pays the highest prices in Europe.

Russia says a deal is only possible if its former Soviet partner joins a customs union including Kazakhstan and Belarus.

Ukrainian President Viktor Yanukovych said yesterday the nation hasn’t found a way to cooperate with the Russian grouping and is seeking to integrate into the European Union.

To contact the reporters on this story: Kateryna Choursina in Kiev at kchoursina@bloomberg.net; Daryna Krasnolutska in Kiev at dkrasnolutsk@bloomberg.net

To contact the editors responsible for this story: James M. Gomez at jagomez@bloomberg.net; Balazs Penz at bpenz@bloomberg.net

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