Ukraine Revives Black Sea Gas Project

The Ukrainian government has revived a Black Sea exploration deal with US firm Vanco, which was put on ice by the previous government of Yulia Tymoshenko.

Reuters reports the decision is part of renewed efforts by President Viktor Yanukovich to tap new ways of developing domestic gas resources and reduce reliance on Russia. The two countries have had testy relations over gas supply for years, with the latest salvo fired being gas giant Gazprom's recent demand for $7 billion to cover unused gas.

Kiev has also tried to persuade Moscow to reduce the price it pays for gas, but has so far failed to secure any reduction.

Government website kmu.gov.ua showed an order rescinding a 2008 resolution which had annulled the license granted to Vanco International Ltd. under a 30-year production-sharing contract for exploration near Kerch on the Crimean peninsula in the Black Sea.

Vanco outbid ExxonMobil and Royal Dutch Shell in 2006 to win the right to develop an area of just under 13,000 square km offshore.

In another posting on the Ukrainian government website, Kiev announced a memorandum of understanding with Turkmenistan on gas exploration and supply. The MoU is between Naftogaz of Ukraine and Turkmengaz.

Minister of Energy and Coal Industry of Ukraine, Eduard Stavitsky, announced that the signed Memo will enlarge cooperation of the countries in oil and gas area. It concerns notably resumption of gas supplies to Ukraine and European countries and exploration of deposits on the territory of Turkmenistan.

Stavitsky said that the amount of supplies, issues of transportation and other details will be worked out later. “Ukraine will participate in open tenders for exploration of deposits on the territory of Turkmenistan which will facilitate increase of volumes of trade turnover between the two states,” he said.