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Facebook users share excerpt about shale and offshore gas in Ukraine from Rupert Russell’s new book Price Wars:

It gives a wrong idea of what was really happening here with shale gas in 2012-2015. We know exactly when and why this story finished. In the end of 2014 Chevron decided to leave shale gas joint project because our Ministry of Finance didn’t implement the required regulations and our taxation system made the project uneconomical – the parliament increased the rental rate from 20% to 70% .

Few months later Shell took the same decision for the same reason.

So we have to blame high rents and obsolete regulations.

Rupert Russell also writes about a deal “to start drilling”. That is misleading – as if Chevron and Shell were about to begin commercial production. In fact the work had to start from geological surveying which would take several years, and only then companies could obtain resource assessment as a base for the decision for commercial production.

By 2013 only preliminary evaluations were conducted and no one could say that real gas reserves would guarantee energy independence or something. The same is true for offshore deposits in Black sea near Crimea. In 2019 the head of Union of oil and gas industry of Russia said that “they’re not much oil and gas” on Crimean shelf.

Domestic political context in 2012-2013 is a separate issue, necessary to be taken into account. I just say that you can imagine anything cynical and corrupted that could take place with politics when money could come to the country, and you won’t go very far wrong. Thus, the story of shale gas in Ukraine is not a lost opportunities story; it is a little bit more complicated.

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3 thoughts on “Shale gas prospects in Ukraine in 2012-2015

  1. Also, those companies are very predatory and do a lot of damage to the countries where they drill and extract. Shale gas extraction can poison the ground water pretty badly, and also cause instability in the land leading to earthquakes. We have had problems with it in my country and in the end the government pulled out of the idea in most areas. So maybe there is a better way for Ukraine to develop financially, I do hope so.

    1. Yes, at those times our media reported about these earthquakes in UK, it was one of arguments against shale gas extraction. In Germany Brewing Association (don’t remember exact name) argued that it would spoil water. A lot of such arguments were published. Here in Ukraine many people protested, that’s why some politics demanded a ban, but lately they changed their opinion. Anyway, these projects didn’t start.
      Ukraine is able to extract enough gas for itself with the usual method; they just don’t invest the necessary money in that. There is no need for shale or offshore gas to become energetically independent, I believe.

  2. well I hope that Ukraine gets the invest money it needs, and focuses on getting their own gas – that might happen now with the west shutting down on using Russian gas – there will be a wide open international market for Ukraine gas.

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