The large natural gas reserves development offshore Ukraine could hang in limbo after the Crimea peninsula returned to Russia’s rule, according to Platts.
Platts’ article focuses on the Ukraine crisis, as well as its implications for natural gas prices and European energy trade flows.
Platts explores how the Crimea returning to Russia has upended Ukraine’s hopes of becoming a natural gas exporter in the near future, and its Black Sea offshore reserves are now owned by Russia.
Following Crimea’s vote supporting a break from Ukraine and de facto annexation by Russia, its self-declared leaders have already announced the nationalisation of the peninsula’s gas pipelines and offshore fields operated by Ukranian companies ChornomorNaftogaz and Ukrtransgaz.
It is believed that major gas development deals with foreign oil companies in the Black Sea offshore Crimea are also on hold at present.
Oil companies including ExxonMobil, Eni, and Austria-based OMV are among those faced with potentially renegotiating existing exploration deals with Russia, said to be the new owner of Crimea, rather than Ukraine.
In 2012, a consortium led by ExxonMobil won a Ukraine tender to tap the Skifska offshore gas deposits in a deal worth more than $12bn at the time.
For the Skifska project, a consortium comprising Exxon, Shell, OMV’s Romanian subsidiary Petrom and Nadra Ukrainy won the initial tender, in August 2012.
In 2013, Ukraine produced approximately twenty billion cubic metres per year of gas domestically, and has been eager to see its offshore gas deposits developed in order to cut its dependence on supplies from Russia.
Image: Crimea’s oil and gas assets. Photo: courtesy of Platts / Chernomornaftogaz.