Shell Makes Bid for Ukraine Gas Fields

Oil major Shell looks set to extend its investment in the gas rich Ukraine, offering UK-based oil and gas independent Regal Petroleum US$400m for a majority stake in the country's gas fields.

Shell Exploration & Production Ukraine Investments (I) BV – an arm of oil major Shell - has signed a memorandum of understanding (MOU) with Regal Petroleum for a 51 percent stake in the fields.

Under the MOU terms, Shell will operate the Dnieper Donetsk sedimentary basin in central-eastern Ukraine, an area where most of the country's gas and condensate production is located.

Regal Petroleum holds the licences for the Mekhediviska-Golotvschinska and Svyrydivske gas fields in Ukraine – described as having good growth potential by Shell.

In 2006, Shell signed an oil and gas exploration agreement with Ukrainian company Ukrgazvydobuvannya to explore eight licence areas in the Dnieper Donetsk Basin.

Shell currently supplies natural gas in the country via its subsidery Shell Ukraine LLC.

By Ozge Ibrahim