February 24, 2012 / 12:20 PM / 7 years ago

Ukraine announces tenders for 2 shale gas deposits

KIEV, Feb 24 (Reuters) - Ukraine is tendering for the exploration and development of two large shale gas deposits, which could attract bids from global energy majors such as ExxonMobil, Shell, Eni and Chevron , the State Geological Service said.

The government of the former Soviet republic will accept bids until April 23, and winners will be able to enter production-sharing agreements (PSAs) with state mining and energy company Nadra Ukrainy.

“The results will be announced at the end of April,” Marina Pekarchuk, a spokeswoman for the geological service, said on Friday. “We expect all major (energy) companies to take part.”

One contract area, Yuzovska, is located in the eastern Donetsk and Kharkiv regions. The other, Olesska, is in the western Lviv region.

Ukraine’s State Geological Service estimates the reserves of the Yuzovska area at 2 trillion cubic metres and those of Olesska at 0.8 to 1.5 trillion cubic metres.

Other estimates are more conservative. Vadim Chuprun, deputy head of state energy firm Naftogaz, told Reuters last November that Ukraine’s shale gas deposits held a total of about 2 trillion cubic metres.

According to the U.S. state Energy Information Administration, Ukraine has Europe’s fourth-largest shale gas reserves at 42 trillion cubic feet (1.2 trillion cubic metres), trailing Poland, France and Norway.

The State Geological Service has also said the Yuzovska area would require $250-300 million in exploration investments, while Olesska would need $150-200 million. Tender application fees are $1.9 million for Yuzovska and $1.3 million for Olesska.

Ukraine is keen to launch shale gas production in order to ease its dependence on Russia, which it says is charging an exorbitant price for its gas.

Last September, Ukrainian state energy firm Naftogaz and ExxonMobil signed a preliminary agreement on exploring and developing shale gas deposits in Ukraine.

Ukraine has also said it planned a $800 million shale gas deal with Shell. (Reporting by Pavel Polityuk; Writing by Olzhas Auyezov, editing by Jane Baird)

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