After years of struggle over natural gas supplies from Russia, the Ukraine is shifting its emphasis to domestic shale gas in an $800 million deal signed with Royal Dutch Shell.
Ukrgazvydobuvannya, the state-owned gas exploration company, awarded its first Ukranian exploration contract to Shell in hopes of tapping it shale gas resources.
The deal was signed on Sept. 1. Under the agreement, Shell is expected to drill up to 1,000 wells into shale formations in six blocks in northeast Ukraine. The country hopes to boost its domestic production by at least 15% and cut Russian supplies by two-thirds.
Ukraine does not currently have the technology to unlock its shale gas resources and will be relying on Shell’s expertise in horizontal drilling and hydraulic fracturing to develop the reserves.
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