Ukraine Sees First Shale Gas Drilling in September

The drilling of Ukraine's first shale gas well will start in September 2012 according to Prime Minister of Ukraine Mykola Azarov who spoke at a briefing after the opening of the Chervonodonetsk gas booster station at the Shebelinka gas field in the Kharkiv region, as quoted by ForUm.

"Ukraine will produce its own shale gas. Maybe we will think over the shale oil production. It is quite an interesting and promising idea," Azarov said.

Ukraine, attempting to move domestic natural gas production forward in order to reduce its dependence on Russian imports, recently announced awards for production sharing agreement to develop Yuzovska and Olesskya gas fields.

In May, Chevron confirmed that it had won exclusive right to sign a production-sharing agreement for the Olessky field in the western Lviv region. Ukraine’s state geological service reports says it holds gas reserves of 0.8 to 1.5 trillion cubic metres.  Eni SpA was also bidding for the Olessky field.

Royal Dutch Shell was reportedly awarded a production-sharing agreement in the Yuzovska concession, located in the eastern Donetsk and Kharkiv regions.  Exxon Mobil and TNK-BP were also reported to be bidders for Yuzovska, which estimated to hold reserves of 2 trillion cubic metres.

The tender specifications required of the winning bidders on the Oleska area are to invest at least $160 million during the exploration stage and $3.1 billion if the decision to start production is made (accordingly, $200 million and $3.7 billion in the Yuzivska area).