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Low Energy Prices And Conflict Drive Shell Out Of Ukrainian Shale
Submitted by Andy Tully via OilPrice.com,
Royal Dutch Shell has been considering ending its partnership with a Ukrainian energy company in a shale gas exploration venture in eastern Ukraine because of the fighting in the region and prospect of little profit from the project.
In fact, at least two news reports say Shell already has notified Ukraine that it’s leaving in a formal “notice of withdrawal.”
The decision by the Anglo-Dutch oil major is more bad news for Ukraine, which had hoped that producing its own gas would make it less reliant on energy from its antagonistic neighbor, Russia, and potentially infuse the country’s distressed economy with much needed foreign investment.
As for Shell itself, sources identified by the Financial Times only as “insiders” said the company had concluded that the project wasn’t worth the effort because of the armed conflict and the precipitous drop in energy prices over the past year, which have made the extraction of oil and gas less cost-effective given the expense needed to ensure efficient output from underground shale formations.
The Kyiv Post quoted a Shell spokesman as saying in an e-mail that the fighting between Ukrainian government forces and separatists supported by Russia amounted to “circumstances beyond Shell’s control.” As a result, the spokesman said, the company has “been prevented from performing its commitments under [the] Yuzivska production sharing agreement,” or PSA.
“Therefore,” the spokesman said, “we have begun discussions with the Ukrainian government and our partner Nadra Yuzivska LLC on the way forward with the PSA, pursuant to its terms.”
Under the agreement, signed by Shell and the Kiev government in January 2013, the company was to have developed a large gas field in the eastern Ukrainian oblasts, or provinces, of Donetsk and Kharkiv, where the fighting has been ongoing for more than a year.
The field, discovered in 2010, has proven reserves of approximately 70.8 trillion cubic feet of gas. Production was supposed to begin in 2017.
A copy of the agreement, released by a Kharkiv city councilman soon after it was signed, would have been fairly lucrative for Ukraine. It required Shell to pay $25 million to the Ukrainian government for signing the agreement, another $50 million once gas production efforts began, $25 million more when the first gas was produced, and a payment of $100 million when the field reached peak production.
Shell isn’t the first Western oil major to withdraw from gas projects in Ukraine. Late last year, Chevron ended its role in a $10 billion shale gas deal in the west of the country. One anonymous “insider” told the Financial Times that the country’s “much hoped-for shale gas boom has gone bust.”
Despite these setbacks, this sources said Kiev will maintain its effort to attract other potential energy partners at a time of capital flight and dwindling foreign direct investment. The International Monetary Fund has set up a $17.5 billion loan program for the country, but also has lowered its forecast for Ukraine’s economy, saying it will contract by 9 percent in 2015 while inflation will continue to rise.
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Adios slimebuckets.
Shell fracking in the Donbass is a side show. The USSA overthrew the Ukie government and installed their puppets to create a hostile and warlike state directly on Russia's border. The loss of Crimea severely weakened their military strategy but the show still goes on.
One picture tells it all
https://www.google.com.br/search?q=rutte+ukraine+shell&source=lnms&tbm=isch&sa=X&ved=0CAcQ_AUoAWoVChMIhPud56qQxgIVyJUNCh3zYABY&biw=1525&bih=705&dpr=0.9
awwww, now Joe with have to find poor little Hunter another crony connected job.
I thought Hunter bit it?
The Little puke will show up somewhere else, likely in Africa, with the same dirty deal format.
Beau Biden passed
Poor Hunter Who is going to buy his cocaine for him now?
can't Plugs Biden jr. fix this? then send the other one... oh wait.
Too soon?
Hell, no.
The dead one has become more competent than the father. So he has that going for him.
Fare thee well you thieving gypsy scum.
(with all due respect to proper gypsies )
Shale will only persist globally if global debt continues to outpace global output. So, if you hate debt and love shale, your brain must be exploding right now.
Get Putin on the horn and make some money. To hell with these western oligarchs.
When I created you I never thought you could become so wasteful. Not only of your own personal energy, your thought and actions, but each and every cache of energy that I have stored that you have so far found.
You disgust me.
Amen.
Good and take that cunt Bleau BiteMe with You
Queen of the Netherlands is a reptilian. She owns a piece of Royal Dutch Shell.
Not reported by western media of coarse:
http://fortruss.blogspot.ca/?m=1
Apparently the House of Representatives is not being bribed enough...
http://www.sott.net/article/297739-Russian-Foreign-Ministry-to-US-Kiev-N...
http://conyers.house.gov/index.cfm/press-releases?ID=0DC46F90-801E-433D-...
Why did some thugs from the CIA steal all the Ukie gold in the middle of the night?Germany wanted their gold back,right?How convenient to rob the Ukraine.
The field, discovered in 2010, has proven reserves of approximately 70.8 trillion cubic feet of gas.
Already similar fields in Poland, Hungary, Romania and The Baltics , Have proven to be total busts! No that gas was not recoverable at anything like profitable rates. Many times the geology was not what it was claimed. Poland was for a few years energy independent in their minds, only to have it all collapse when real holes were drilled. Eastern European frack gas dreams have all turned to crap. I believe much of Ukraine's bonanza of gas is also unproven geology, when drilled, they may prove les than claimed.
California, only a few years ago was held up as America's greatest new gas find. Remember? That too was found to be totally fabricated. Once real wells were put down. Eastern Europe was lured by Washington with dreams of Frack Gas and energy independence. Thus able to join Washington in a great anti Russian crusade. But now it is proven this was a Washington lie, and Russian gas, cheap and reliable is needed for some time to come.
Probably Shell prefers not to be associated with Nazi business partners....
check into who holds the drilling rights to the eastern Ukrainian shale...
(hint: don't be surprised if you see Burisma/Kolomoisky/Hunter Biden and the like)
Even if there had actually been recoverable gas in there, and just supposing some of it was extracted, there'd have beeen this great slurping noise as any and all profits were nicked by the thieves and nazis that now run Ukraine on behalf of the CIA. Still US puppet Lagarde will still slip millions in the Ukie bank to keep the war machine afloat, the IMF's a total joke.
Bust!!!
Normal life is almost impossible in Ukraine. Inflation in Ukraine is at 272%, the hryvnia’s worth at less than 40% of what it was. Inflation has rocketed, salaries have collapsed, businesses across Ukraine have closed. In short, people don’t have any money in Ukraine anymore – sales of new cars down 67% year-on-year – production of cars down 96%, 46 banks declared insolvent in the last year.
As for the eternal thorn in Ukraine’s side, corruption, one which apparently became so pressing one of the defining aims of Maidan was to extricate it – it’s even worse than it was before.
Ukraine’s debt is over $80 billion – set to hit $100 billion soon, 100% and rising of a sinking GDP. An agreed recent IMF bailout programme of $17,5 billion would only scratch the surface. Ukraine’s economy shrunk 7.5%, by conservative estimates, in 2014. Estimates for this year range from 6% to over 20%. European governments pledge support, meanwhile European businesses withdraw on mass, hundreds have already left the Ukrainian market, most of the 600 German firms operating in Ukraine conducting an audit about withdrawing from the market.
Trade with the country which was Ukraine’s leading export and import parter by far, Russia, understandably decimated, Ukraine’s economy is stricken, and only going down.
Excerpts from: 10 Reasons Ukraine is Dead
http://thetruthspeaker.co/2015/04/19/10-reasons-ukraine-is-dead/
Yeh, but Mike, you're missing the big picture 'Russia is isolated.'
When Arshole Yatsenyuk gets his come-uppence and is butt-fucked with a sword (Ghadaffi style) by the locals will it be pay-per-view?
And will he be screaming "Vicky you fuckin' whore, you promised me the Earth..."
It's a rhetorical question, I'm not expecting a serious answer.