Ukraine Signed Natural Gas Production-Sharing Agreement with Exxon and Shell

Sep 27, 2013 14:18 IST

Ukraine on 26 September 2013 announced that it entered into the natural gas production-sharing agreement with a consortium which was led by Exxon and Shell. This will help Ukraine towards energy diversification as well as reduced dependence on Russia. The consortium also included Petrom, the Romanian energy group as well as Ukraine's state-owned Nadra Ukrainy. Nadra Ukrainy will be responsible for extraction of natural gas on the Skifski site near the Ukraine's Black Sea coast.

The initial accord was signed by the Ukrainian Energy Minister Eduard Stavytsky and representatives of Exxon, Shell, and Petrom on the sidelines of the UN General Assembly in New York. The formal production-sharing agreement will be signed by October 2013 in Kiev, the capital of Ukraine.

Skifski is situated in the north-west part of the Black Sea, near Romania. It is expected that Skifski will provide 8-10 billion cubic metres of natural gas annually. The agreement will help Ukraine in diversification of its energy sources.

The Shell and Exxon deal was a result of the recent moves by Ukraine to attract European Union as well as retract from Russia. It is important to note that Russia threatened trade sanctions as well. Ukraine, in the meanwhile, may also sign the association agreement with the EU in November 2013.

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Read more Current Affairs on: Ukraine , Exxon , Shell , natural gas

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