Ukraine Plans Black Sea Tenders

Ukraine plans to announce the opening of bidding to enter into production sharing agreements (PSAs) on exploration and production in the Scythian and Forosskogo (Foros) deep shelf areas of the Black Sea.

The conditions of competition indicate a required payment of US$300 million to Ukraine upon the award of the PSA, together with a minimum commitment of US$200 million in the first phase of exploration. Ukraine will hold an interest of not less than twenty percent of production.

The Ukrainian government estimates that Scythian area, about 17 thousand sq kms, requires total investment ranging from $10-12 billion to generate annual gas volumes of 3-4 billion cubic meters. Required investment in 14 thousand sq. km. Foros project is estimated at $8-10 billion, to yield annual gas production of 2-3 billion cubic meters.

Minister of Environment and Natural Resources Eduard Stavitsky said that bidding may open as early as June 5th, with the process likely to take three months prior to an award.