Ukraine, Shell Ink Agreement on Hydrocarbon Extraction
OREANDA-NEWS. September 16, 2013. In the presence of Prime Minister of Ukraine Mykola Azarov the Government of Ukraine and the Royal Dutch Shell have signed an Agreement on the operational activity concerning the Agreement on distribution of hydrocarbon extracted in Yuzivska area.
“It is directly the Agreement that gives complete permission for investing and carrying out activities in the Yuzivska area. Since this day the work of the Royal Dutch Shell is commenced in Ukraine in fact and in law,” Minister of Energy and Coal Industry Eduard Stavytskyi said.
The Minister underlined, according to the signed Agreement on distribution of production, at the first stage the Royal Dutch Shell will invest into geoexploration around USD 500 mln, while overall investments of the company into industrial and communication development in the Yuzivska area are estimated to the tune of USD 10 bln.
Eduard Stavystkyi reminded that pursuant to the Agreement, depending on the amounts of extraction 30% to 60% gas will belong to the country. At the same time between the investors – the Royal Dutch Shell and the Nadra Yuzivska – 50 by 50.
The Minister stressed that in the Yuzivska area there will be extracted traditional natural gas, shale gas and gas from tight sandstones as well.
According to Eduard Stavytskyi, after signing of the operational Agreement there commence tender procedures to which, on the conditions of the contract, Ukrainian specialists in geophysical exploration and seismic operations are involved. The Minister added the respective activities will be finalized by the end of the current year.
Eduard Stavytskyi noted that first free gas from Yuzivska area is expected in the end of 2014. “Practically, gas extraction will start from 2015,” the Minister explained.
Yuzivska area is situated on the territory of Donetsk and Kharkiv regions. On the Royal Dutch Shell expert forecasts, the predictable gas storages make up 3-3.5 trillion cubic meters.
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