Caspian Report - Issue 06 - Winter 2014

onmental monitoring and expert
review. 6
As well as the leading shale gas production
companies, there are also
others with plans for Ukraine. For example,
Italian Eni and British Cadogan
are planning to sink first shale
gas prospecting well by the middle of
2014.
A PRODUCTION SHARING AGREEMENT (PSA) BETWEEN
SHELL AND THE UKRAINIAN GOVERNMENT WAS SIGNED
IN FEBRUARY 2013.
The British exploration company
JKX Oil & Gas has recently finished
its 10-stage hydraulic fracturing
campaign in Ukraine. The company’s
CEO Paul Davies said that only
one of the 10 hydraulic fracturing
operations carried out in Ukraine
was unsuccessful. JKX started its
multistage hydraulic fracturing
operation at its Rudenkovskoye license
area in eastern Ukraine in July
2013.
There should be greater awareness
that shale gas in Ukraine is still a
risky investment and could end up in
failure. Ukraine risks following in the
footsteps of Poland, which had promising
initial shale forecasts but disappointing
early extraction attempts.
However, Lane Energy Poland, an oil
and gas exploration company controlled
by ConocoPhillips, is now
extracting some 8,000 cubic meters
of shale gas per day at a test well in
northern Poland, an amount unseen
in Europe to date. 7 Thus Poland is
still at the front line of shale gas exploration
and production in Europe.
Ukraine, however, is not yet at the
stage that Poland reached before
failure, so all deals and exploration
contracts must be viewed in light of
possible failure.
49
CASPIAN REPORT, WINTER 2014
6
. Chevron operations at Ukraine’s Oleska shale won’t begin before July 1 - Ecology Minister - http://en.interfax.com.ua/
news/economic/186358.html
7
. Poland’s shale gas hopes buoyed by promising test output - http://www.reuters.com/article/2013/ 08/28/
poland-shale-idUSL6N0GT0OI20130828