23 Nov 2013

Royal Dutch Shell (Shell), co-signed a $10 billion shale/gas exploration/development deal with the Ukrainian government Jan 2013.  Shell expects to start drilling in the Yuzivska field in 2014  Ukranian  Energy Minister Eduard Stavytsky said: “$10 billion would be invested if the geology meets expectations   Ukraine (neighbor to Russia, and a former member of the Soviet Union),Has for many years depended on expensive/unreliable  Russian gas imports to cover more than 60% of its consumption, is now pushing to develop its own reserves, both onshore and offshore, in the Black Sea.

Graham Tiley,  Shell’s country manager in the Ukraine,  in an interview in Kiev, on 6 Nov 2013 said: .Shell will need to drill as many as 15 wells to complete the initial exploration appraisal of the 8,000 square-kilometer (3,100 square-mile) Yuzivska field in the eastern part of the country, ”…If you look across all these different projects, and if you look at interests of not just Shell, but major oil and gas companies, you would say Ukraine has a good chance to boost its output…The sector has been under-invested and I assume over time the domestic production will increase.”Mr. Tiley added: “So far all of Shell’s projects remain in the exploration phase…Until we get out there, drill some wells and test them, we simply won’t know how much of the area is going to be commercially productive…Right now the testing phase will take some months before we have some results, and that will be only from one well…Separately, the consortium has also completed drilling its first well in the Kharkiv region together with Ukranian state company DK Ukrhazvydobuvannya, a unit of NAK Naftogaz Ukrainy, and is preparing to drill two more wells in 2014.

The Ukranian government also signed a production-sharing agreement with Chevron Corp. on 7 Nov.2013 for exploration/extraction of shale gas; and plans to complete its negotiations by the end of 2013 with an “Exxon Mobil Corp-led group”(consortium), which includes Shell, to explore off Ukraine’s western Black Sea coast.

Thanks to Bloomberg for their 8 Nov 2013 story.



ENTER –“HYDRAULIC FRACTURING” (Fracking)  The relatively new and still controversial  Oil/Nat gas exploration/exploitation technology has produced a shale-gas boom in the USA, such that it has quickly outproduced Rusia as the world’s largest Nat gas producer. It is no wonder many other countries are looking at fracking as a potential solution to their energy problems. Ukraine could hold as much as 42 trillion cubic feet (1.2 trillion cubic meters) of shale gas, the third largest reserve in Europe, according to a 2011 U.S. Energy Information Admin. report.

RUSSIA HAS USED NAT- GAS FOR POLITICAL CONTROL of its former republics..  By forcing Nat gas pipeline-deals, port concessions for Black-Sea access, etc., Putin has successfully used Gazprom, to assert Russia’s political control of its former Republics during the past decade.; However, fracking in many places, and  domestic competition in Russia, is causing Gazprom to lose Nat gas primacy worldwide. We wish Russia would treat its neighbors as themselves, because “what goes around, comes around”, and The Russian people, as most of Eastern Europe, have endured/suffered enough since WWII.  One would hope they would be more politically understanding and helpful. Equal treatment would suffice.>

NATURALLY, UKRAINE SEEKS ENERGY INDEPENDENCE Another worry for Gazprom, is the urgent desire of Ukraine to free itself of dependence on Russian imports of Gazprom’s Nat gas. Over the past decade, the two countries have frequently clashed over gas prices/availability at peak-usage times. In the past, that has resulted in disruptions to the Nat gas flow through Ukraine to Europe.  Pres. Putin granted Gazprom a Nat gas export monopoly, and helped secure the “Nord Stream pipeline project” to Europe.  Significantly, Gazprom gained control over Belarus’s pipeline network, and negotiated a Nat gas price deal with Ukraine that extended Russia’s lease of a Ukrainian Black Sea port of Sevastopol used as a Russian naval base (KEEP IN MIND RUSSIA HAS NO SEAPORTS IN THE BLACK SEA. In other words, Putin et-al, has made its former Republics “A deal they could not refuse” if they wanted Nat gas.  AS WE SAY IN AMERICA: “WITH FRIENDS LIKE THAT, WHO NEEDS ENEMIES.

ABOUT UKRAINE: A country in Eastern Europe.  Its Capital city is Kiev (pop. about 3 mil.). It borders the Russian Federation to the east and northeast, Belarus to the northwest, Poland, Slovakia and Hungary to the west, Romania and Moldova to the southwest, and the Black Sea and the Sea of Azov to the south and southeast, respectively. IT HAS A LAND AREA of 603,628 km2 (233,062 sq mi), making it the largest country entirely within Europe. It is also home to the now infamous  Soviet Nuclear Power Plant disaster of Chernobyl, near Kiev.  Ukraine last became independent when the Soviet Union dissolved in 1991.  GRAIN PRODUCER/EXPORTER Throughout its history, Ukraine has been one of the powerhouses of world agriculture due to the fertility of its land.  The country was the world’s third-largest grain exporter( as of 2011).  POLITICALLY: Since the dissolution of the Soviet union(1991),Ukraine is a Republic under a semi-presidential system with separate  Legislative, Executive, and Judicial branches of government.  POPULATION: The country is home to 46 million people,- 77.8 % of whom are ethnic Ukranians, with sizable minorities of Russians (17%), Belarusians Romanians, and other nationalities  RELIGION The dominant religion in the country is Eastern Orthodox Christianity, which has strongly influenced Ukraine’s architecture, literature and music.

UKRANIAN AERONAUTICAL PRODIGY, Oleg Konstantinovich Antonov (1906-1984) was a world renown Soviet cargo aircraft designer, and the first designer/chief of the Antonov world-famous aircraft company in Ukraine, later named in his honour. Antonov was personally responsible for designing a very successful line of Soviet cargo aircraft from the Antonov AN-2 (Anne) single prop, bi-plane (1946), and up to what may well be the world’s best ultra-large cargo plane, the AN 124 ( in many variants ); similar to the USAs C-5A. It has been used by many countries(including the USA) to ferry heavy,oversize cargo, over long distances at very competitive prices.

ABOUT NATURAL GAS. It is a wonderful fossil fuel because it produces about half as many greenhouse gasses as anthracite coal, when used to generate electricity. It is also very versatile as home heating fuel etc. It can also be used as a fertilizer precursor; and as such, we will someday wish we had not “burned-up” so much of it. We must view it as a “transition fuel” perhaps for 50 years; however it is a fossil-fuel, and as such, a non-renewable resource. The world should see Nat gas use as the last chance to prepare renewable (Green-energy). Fortunately, many nations can see far enough ahead to realize that we must ultimately develop/emplace sustainable green energy means, be they whatever best suits each country.

RENEWABLE ENERGY OUTLOOK IN UKRAINE The share of “renewables” within the total energy mix of Ukraine is still very small, but growing fast. In 2011 it stood at 397 megawatts (MW). Also in 2011, several large “solar power stations” were opened in Ukraine, among them Europe’s largest solar park in Perovo, (Crimea). Ukranian “State Agency for Energy Efficiency and Conservation” forecasts that combined installed capacity of wind and solar power plants in Ukraine could increase by another 600 MW in 2012. According to Macquarie Research, by 2016 Ukraine will construct and commission new solar power stations with a total capacity of 1.8 GW, which is almost equivalent to the capacity of two nuclear power plants.

UKRAINE AND OTHER EX-SOVIET REPUBLICS WANT DESPERATELY TO JOIN THE EUROPEAN UNION (EU). > Many of them are still clamoring for their governments to leave the Russian sphere of influence; However, Russia’s  Pres. Putin has been able to suppress those longings thus far.  Energy independence from Russia holds the key to do so; Hence, Russia must be looking apprehensively at their efforts to “frack” their way out of subjugation. We wish them all well, and may their efforts be rewarded with good energy exploration/exploitation partners, and energy self-sufficiency. Ukranians are a very diligent, talented, industrious, and tolerant people who deserve no less.

Edward Oliver Gonzalez (gonzedo)


November 23, 2013 at 11:35 AM
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