Ukraine Develops Shale Gas For Greater Energy Independence – Energy Minister

Washington, June 5, 2012. Achieving energy independence has become top priority for the President of Ukraine Viktor Yanukovych. Such statement was made during the Washington meeting of the working group on energy security co-chaired by the Ukrainian Energy and Coal Industry Minister Yuriy Boyko and Special Envoy of the United States Secretary of State for Eurasian Energy Richard Morningstar.

Richard Morningstar and Yuriy Boyko approved of the progress in the implementation of the program of reactivation of the dormant marginal oil and gas fields. This project has been supported by the U.S. Agency for Trade and Development and the U.S. Department of Energy.

"Ukraine has made concrete steps toward development of shale gas production. The first license tenders have been awarded to Shell and Chevron. Ukraine will continue moving in this direction, since the potential of shale gas is huge ", - said Yuri Boyko. According to the minister Ukraine will soon hold new tenders for the development of the two deep-water areas on the Black Sea shelf.

In May of 2012, two of the world’s largest oil companies Royal Dutch Shell plc. and Chevron Corp obtained the right to develop Ukrainian shale gas fields Yuzivske and Oleske. This was a public bid Ukraine has announced back in February of 2012 for the development of the prospective seven trillion cubic meters of shale gas. Notably, Exxon Mobil, TNK-BP and Eni also placed their bids for the right to develop the abovementioned fields that are expected to provide Ukraine with up to ten percent of domestically consumed natural gas by 2020.

At the time, minister Boyko stated that Ukraine planned to set up domestic shale gas extraction in five years. Comparatively, it took the U.S. 20 years to accomplish similar goal. By 2020 Ukraine plans to extract four to five billion cubic meters of shale gas annually. The country prospects to consume 53.7 billion cubic meters of gas with 26 billion of total domestic consumption.

Ukraine has set a new goal for improving its energy independence by adopting the State Program on Energy Efficiency 2010-2015. According to the document, Ukraine will reduce domestic energy consumption through increasing energy efficiency, developing unconventional gas production, developing domestic gas reserves, introducing green energy production technology, and diversifying gas import.