KIEV, November 5 (RIA Novosti) – Ukraine signed a $10 billion shale gas deal Tuesday with US energy giant Chevron on Tuesday as part of Kiev’s ongoing efforts to diversify its energy supplies and reduce dependence on Russia.
Chevron signed the contract for exploration and production at the Olesska field in western Ukraine after a government meeting, Ukrainian Energy Minister Eduard Stavytsky told reporters.
Production at Olesska could yield up to 10 billion cubic meters of natural gas every year and generate about $10 billion in investment, Ukrainian officials have estimated.
The Chevron tie-up is the latest in a series of mega-deals with international energy giants as Ukraine looks to tap its unconventional gas deposits and offshore fields, reducing the amount of gas it buys from Russia.
President Viktor Yanukovych said Tuesday that agreements like the Chevron deal will allow Ukraine to become fully energy independent by 2020.
In January, Anglo-Dutch oil major Shell signed a shale gas production sharing agreement for the Yuzivska field with Kiev, which officials also said would generate up to $10 billion of investment.
Last year, a consortium led by Shell and ExxonMobil beat off competition from Russian companies to win a tender to develop Ukraine’s Skifska gas and oil field in the Black Sea.
Reliant on energy imports, Kiev says it has paid Russia $20 billion over the last three years for natural gas, and claims Moscow exploits its dominant position as a supplier to impose exorbitant prices.
Russia warned Ukraine of a crisis last week over an unpaid $882 million gas bill, sparking fears of a recurrence of pricing disputes in 2006 and 2009 when Moscow temporarily shut off gas deliveries not just to Ukraine, but also to some European countries.
Tensions between Moscow and Kiev are escalating ahead of Ukraine’s plans to sign free trade and association agreements with the European Union later this month, spurning Russia’s nascent Customs Union with Kazakhstan and Belarus.
