Black Sea oil and gas picture

New Business Opportunities in Black Sea Oil & Gas

Black Sea Oil & Gas Forum 2014 is the premier strategic international conference devoted exclusively to the development   discovery under the Black Sea, with preliminary estimations speaking about a natural gas deposit of 42-84 billion cubic meters, equivalent to 3-6 times the annual consumption of Romania.  http://www.roconsulboston.com/Pages/InfoPages/Government/ExxonOMVGas.html

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11-12-13 

Despite the occasional setback – political and exploratory – the Black Sea continues to draw interest from international oil companies, including heavy hitters such as ExxonMobil, Total, Shell, and Repsol. Fewer than 100 offshore wells have been drilled in the Black Sea and, until recently, its deeper waters remained mostly unexamined by seismic surveys.

In efforts to counter a drop in onshore production while reducing their reliance on imports from Russia, countries that border the Black Sea have launched bid rounds and entered production-sharing agreements with operators.

Licensed acreage offshore Romania Petroceltic

Licensed acreage offshore Romania. (Map courtesy Petroceltic)

Russia

In 2011, ExxonMobil reached an agreement with Rosneft to jointly develop oil and gas resources in the Russian sector of the Black Sea, with an initial focus on the Tuapse Trough, where Rosneft has identified around 70 prospective structures in water depths ranging from 1,000-2,000 m (3,281-6,562 ft). A similar agreement with Chevron reportedly fell through.

As recently as last June, ExxonMobil had agreed to bear the brunt of the estimated $3.2 billion in initial exploration costs for the company’s joint ventures with Rosneft in the Black Sea and Kara Sea, in Russia’s far north. Drilling in the Tuapse area is scheduled to begin next year, following analysis of seismic data gathered in 2013.

Ukraine

In September, Ukraine signed an agreement with ExxonMobil, Shell, and OMV Petrom to draw up a production-sharing contract to explore the Skifska prospect. At the signing ceremony in New York, Ukraine Energy Minister Eduard Stavytskyi said “practical works” such as seismic gathering could get under way before the end of the year. The agreement includes an up-front payment of more than $300 million and a commitment to spend another $400 million on seismic acquisition and two deepwater wells.  http://www.offshore-mag.com/articles/print/volume-73/issue-11/black-sea/black-sea-holds-promise-as-nations-seek-energy-independence.html

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2-24-14    In 2012, Ukraine’s central government (under Yanukovych) selected Shell (ticker: RDS-a) and Chevron (CVX) as the winning bidders for two multi-Tcf shale-gas concessions. The Yuzivska concession, won by Shell, is located in eastern Ukraine; the Olesska concession, won by Chevron, is in the west, near Poland. As is the case across Europe, shale drilling has faced some controversy in Ukraine, but regional councils have voted overwhelmingly to approve the deals. The Shell deal alone is estimated to entail long-term investment of $10 billion, though commercial-scale production is not expected until 2017 at the earliest. The government’s target — which doesn’t strike us as particularly aggressive — is for 2030 shale-gas production of 0.2 to 0.4 Bcf per day, less than 10% of current consumption levels.  http://online.barrons.com/article/SB50001424053111904148504579403072049325430.html?mod=BOL_da_is

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(Reuters) – Ukraine signed a $10 billion shale gas production-sharing agreement with U.S. Chevron (CVX.N) on Tuesday, another step in a drive for more energy independence from Russia.

The deal to develop its western Olesska field followed a similar shale gas agreement with Royal Dutch Shell (RDSa.L) in January and boosts Ukraine’s leadership at a time of fraught relations with Moscow over gas supplies.  http://www.reuters.com/article/2013/11/05/us-ukraine-chevron-idUSBRE9A40ML20131105

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1-17-14  

Russia said on Friday that the gas drilling technology which Ukraine plans on using “could pollute water supplies for Russians living near the border between the two countries,” the Moscow Times wrote.

Deputy Environment Minister Rinat Gizatulin said there are “real concerns about contamination because potential drilling sites may be in close proximity to aquifers,” UPI reported.

Gizatulin has called for a bilateral meeting to address these concerns.

Ukraine is extremely important to Russia’s natural gas market; nearly every Russian pipeline that transports gas to the rest of Europe passes through Ukraine.

Currently, Ukraine’s domestic natural gas production accounts for about 30% of demand. Russia makes up the remainder, according data from the US Energy Information Administration (EIA).

Highly dependent on Russia for its gas supplies, Ukraine has been looking to diversify its sources. In January 2013, Shell decided to explore the country for shale gas. According to the EIA, Ukraine could start exporting shale gas resources to western Europe as early as 2020.

Chevron is also eager to get a piece of the pie. The energy giant signed a $10 billion production-sharing agreement with Ukraine last year.  http://www.mining.com/russia-is-getting-queasy-about-ukraines-shale-plans-42366/

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jan 2011

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Dec 2009
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