Shell and Chevron to Leave Ukraine

In 2013 the English-Dutch Royal Dutch Shell, Europe’s largest energy company, signed a contract with the Ukrainian government to exploit the Yuzivska shale gas field. Yuzivska holds more than 1 trillion cubic meters of shale gas. See map 1.

Map 1

Map of Yuzivska Gas Field

http://www.osw.waw.pl/sites/default/files/image/Map.png

As you can read at the following Euractiv article, titled “Russia’s silent shale gas victory in Ukraine”, September 2015, Shell would invest 10 billion dollars, and by 2030 she would reach production levels of 20 billion cubic meters, which could satisfy most of the Ukrainian domestic demand. The article mentions that many believe that this gas field is one of the main reasons the Russia help the Ukrainian separatists.

As you can read at the following Financial Times article, titled “Shell to withdraw from shale gas exploration in eastern Ukraine”, June 2015, Shell informed the government of Ukraine that she will leave the country due to the situation in East Ukraine. As you can read at the following Oil Price article, titled “Chevron Pulls Out Of $10 Billion Gas Deal With Ukraine”, December 2014, earlier the American energy firm Chevron had left Ukraine too. Chevron had agreed with the Ukrainian government to exploit the Olesska shale gas field in Western Ukraine (see map). According to the article Chevron would produce another 10 billion cubic meters of gas from this field.

Ukraine used to cover most of her energy needs with natural gas, but this has changed due to the problems between Russia and Ukraine. The Ukrainians claim that the Russians charge them higher prices in order to finance the Ukrainian oligarchs who promote the Russian energy policy, and the Russians claim that the Ukrainians steal natural gas which is supposed to go to Europe. I thing that both claims are valid to a certain extend. However even today Ukraine consumes more than 40 billion cubic meters of natural gas every year, which is a huge quantity.

What is for sure though is that the departure of Chevron and Shell from Ukraine is a victory for the Russians.

“Russia’s silent shale gas victory in Ukraine”, September 2015

http://www.euractiv.com/sections/europes-east/russias-silent-shale-gas-victory-ukraine-317270

“Shell to withdraw from shale gas exploration in eastern Ukraine”, June 2015

http://www.ft.com/intl/cms/s/0/0c66011e-104a-11e5-bd70-00144feabdc0.html#axzz3l2jkOtq8

“Chevron Pulls Out Of $10 Billion Gas Deal With Ukraine”, December 2014

http://oilprice.com/Energy/Natural-Gas/Chevron-Pulls-Out-Of-10-Billion-Gas-Deal-With-Ukraine.html

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