Shell, Ukraine’s Naftogaz draft deal on Black Sea shelf development

Ukraine’s state-run Naftogaz energy company is drafting an agreement with global oil and gas group Shell to develop the Black Sea shelf, Ukrainian Deputy Fuel and Energy Minister Serhiy Chekh said on Friday.

The document will soon be considered by the Ukrainian government, Chekh told members of the Ukrainian parliament.

Shell, U.S. company Chevron and Russia’s largest private oil company Lukoil have all expressed interest in developing the Black Sea shelf.

Chekh said Naftogaz is also in negotiations with Lukoil.

Shell Ukraine, Shell’s Ukrainian subsidiary, said in March it hoped the Ukrainian government would hold shelf development tenders by the summer.

Chekh said Ukraine could boost oil and gas production in the Black Sea and the Sea of Azov but it would require significant investment.

Ukraine plans to raise oil output on the Black Sea shelf to 2.9 million tons a year by 2015, including gas condensate, Chekh added.

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