Exxon, Shell-led group win Ukraine Black Sea project
* Offshore field to produce 5 bcm of gas per year
* Consortium had competed with Russia’s Lukoil
* Ukraine seeks to ease dependence on Russian gas
KYIV, Aug 15 (Reuters) – Ukraine has selected a consortium
led by ExxonMobil and Royal Dutch Shell to
develop its Skifska gas and oil field in the Black Sea, a
government minister said on Wednesday.
The project, whose total costs have been estimated by the
government at $10-12 billion, is part of the former Soviet
republic’s plan to ease its dependence on gas imported from
Russia, which amounted to some 40 billion cubic metres last year
and accounted for nearly two thirds of the country’s
consumption.
“The government has supported a proposal … to sign a
production-sharing agreement naming a group of companies, led by
ExxonMobil as operator,” Environment and Natural Resources
minister Eduard Stavitsky told reporters.
Skifska, predominantly a gas field, is estimated to hold
reserves of 200 to 250 bcm of gas, he said, and is expected to
eventually produce 5 bcm a year.
Russia’s Lukoil had also bid in the tendering for
Skifska.
Stavitsky said the winning consortium, which also includes
Romania’s OMV Petrom and Ukrainian state company Nadra Ukrainy,
would start work on the field this year.
As a condition of the tender, the winner must pay the
government 2.4 billion hryvnias (about $300 million) after
signing the 50-year production sharing agreement.
The price of Russian gas imports has been rising steadily
over the past three years but Kyiv’s attempts to renegotiate the
supply agreement have so far been unsuccessful and the
government is now trying to cut imports instead by switching to
coal, cutting overall consumption and developing domestic gas
deposits.
In May the government picked Shell and Chevron Corp
as partners in projects to explore and develop two potentially
large onshore shale gas fields.