TNK-BP Plan Shale Gas Drilling in Ukraine

Russia's third largest oil firm, TNK-BP, plans to start a shale gas exploration project in Ukraine in the first half of this year, TNK-BP's Ukrainian division said on Monday.

In October, TNK-BP and the Ukrainian government signed a memorandum saying the firm would explore shale gas in Ukraine's eastern Donetsk region.

"We expect that the first stage of the project -- surveying and test drilling -- will be launched this year," a TNK-BP spokesman said.

One of TNK-BP's billionaire shareholders, German Khan, told Reuters last year the company planned to plough between $1 billion and $2 billion into the project in the next 25 years.

He also said that TNK-BP was hoping to produce some 5 billion cubic metres of shale gas -- natural gas trapped in layered rock, rather than porous reservoirs -- in 5 to 7 years.

In November, TNK-BP said it would invest $3.8 billion in its gas business over the next three years as it aimed to more than double production to 30 billion cubic meters (bcm) by 2020.