Shell, Chevron likely to win Ukraine deals to explore shale gas

Anglo-Dutch Shell and Chevron of the United States are likely to win the right to explore and develop the fields, seeing off rival bids from Italy’s Eni, Exxon Mobil and Russia’s TNK-BP, the source told Reuters. One contract area, Yuzivska, is in the eastern Donetsk and Kharkiv regions with the other, Olesska, in the western Lviv region. “(The likely winners are) Shell for Yuzivska and Chevron for Olesska,” the source said.

President Viktor Yanukovich has improved relations with Moscow, but Ukraine still hopes to develop its own reserves as Russia has used gas supplies as a political weapon in dealings with its smaller former Soviet neighbour in the past.Ukraine has Europe’s third-largest shale gas reserves at 42 trillion cubic feet (1.2 trillion cubic metres), according to the U.S. state Energy Information Administration, trailing France and Norway. Exploiting the fields will require the drilling method known as fracking, which helps companies to tap gas and oil from previously inaccessible shale formations.