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Shell for shale: Ukraine signs major deal

Shell for shale: Ukraine signs major deal
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Ukraine has signed a major gas exploitation deal worth a potential 7.5 billion euros with the Dutch energy giant Shell in a move away from dependence on Russian fuel.

They signed on the dotted-line for the 50 year production-sharing agreement on the sidelines of the World Economic Forum in Davos.

It is Europe’s biggest shale gas contract yet, and the biggest foreign investment in the former soviet republic.

Ukraine’s energy minister Eduard Stavytskyi told euronews: “I am sure that this is a very important step towards the energy independence of our state. That’s why we are developing relationships with European partners. Right now that’s Royal Dutch Shell.”

Not everyone is happy though. Opponents have repeated concerns about the so-called fracking techniques that extract the gas.

MP Andriy Mkhnyk from the opposition Svoboda party said: “We need a transparent scheme of gas extraction, we need to understand what the risks are and who will pay if it impacts adversely on the environment. Who would clean up, or would the Ukrainian people be left again to deal with all these problems alone?”

Full gas production depends on successful results from 15 test wells. Even then, it will still be some years before the gas starts flowing fully.

Disputes between Kiev and Moscow have disrupted supplies of Russian gas in the past. In 2006 and 2009 Russia shut the taps, leaving many EU customers without fuel in the depths of winter.