Ukraine Signs $10 Billion Shale Gas Agreement with Chevron

Ukraine signed a shale gas production-sharing agreement with Chevron on Tuesday, giving the US energy company the right to explore the Olesska deposit in the west of the country. 

"The agreements with Shell and Chevron ... will enable us to have full sufficiency in gas by 2020 and, under an optimistic scenario, even enable us to export energy," President Viktor Yanukovich commented. 

According to a note released by the Energy Ministry, Chevron will initially invest $350 million a year. The total investment is expected to exceed $10 billion. 

The deal with Chevron was anticipated last month after the second regional council approved the document proposed by the central government.

Ukraine recently opened the doors to shale explorations. It signed a contract with Royal Dutch Shell, allowing the Netherlands-based energy company to explore the Yuviska block. Gas extraction activities are scheduled to start in 2015. 

Ukraine's government is keen to produce locally to ease dependence on Russia. Ukraine also continues to make ambitious plans to decrease national energy consumption, switch its power stations from natural gas to coal, build an LNG terminal, and open reverse flows of gas from Europe.