ENI, Cadogan to Invest in Shale Gas in Ukraine

ENI SpA and Cadogan Petroleum plan to invest about USD 55 million in the exploration and production of shale gas in Ukraine.

At a meeting with the leadership of the State Service for Geology and Mineral Resources of Ukraine on November 28, ENI and Cadogan presented a project on the exploration and production of shale gas in the Lviv basin (western Ukraine).

The press office of the State Service for Geology and Mineral Resources reported that the goal of exploration work should be the confirmation of assumptions about the potential of shale gas of the Paleozoic era and the removal of risks for selecting a production site. The exploration program covers the period of 2012-2015.

Experts noted that the development of the region should include a non-traditional approach to study and production, as well as the mandatory use of hydraulic fracturing technology.

During the work, it is planned to continue the process of exploration at the stage of designing in order to reduce risks, because the area is new for study and requires adaptation for the Ukrainian oil shale rock.

Under the program, four prospecting clusters will be drilled with the use of vertical and horizontal drilling technology and hydraulic fracturing.

The total project cost is about USD 55 million. In case of the timely implementation of all points of the program, the first exploration wells will be drilled in late 2012.

Ukraine's national JSC Naftogaz and Italy's integrated oil and gas company ENI Ukraine Holdings B.V., which operates in 70 countries, signed a memorandum on the implementation of an agreement on research and cooperation at the end of September 2011.

In July 2011, British oil and gas production company Cadogan Petroleum transferred part of the Pokrovska and Zahorianska licenses (Ukraine) to ENI.

As reported, Ukraine plans to produce 4-5 billion cubic meters of shale gas by 2020, thus covering up to 10% of its gas needs through alternative fuels.

Source: Ukrinform