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.