The government of Ukraine has approved two proposals for conducting competitions for the development of oil and gas resources in the western regions of the country. Specifically, this concerns the Mezhyhirsk and Svychan areas, which are located in the territories of Lviv, Ivano-Frankivsk, and Chernivtsi regions.
This is reported by Finway
It is expected that cooperation with the new investor will take place under a production sharing agreement. This means that the investor will assume all risks and costs associated with geological exploration and the development of the field. In the event of successful extraction, the product will be distributed between the state and the investor according to a predetermined formula.
Ukrnafta Moves to Extraction
At the same time, the company “Ukrnafta” will begin to implement the production sharing agreement (PSA) regarding hydrocarbon extraction in the Oleska area, located in the Lviv and Ivano-Frankivsk regions. This decision was made instead of the previous plan for cooperation with the company “Nadra Oleska,” which had previously intended to operate in this area. Initially, the development of the Oleska area was planned to be carried out by the American company Chevron.
History of Cooperation with Chevron
The production sharing agreement between Ukraine, Chevron B. V. Ukraine, and “Nadra Oleska” was signed in 2013. It was anticipated that gas production in the Oleska area would amount to between 5 and 10 billion cubic meters per year. The signing of the PSA also aimed to initiate work on the extraction of shale gas, which was estimated at 2.98 trillion cubic meters. However, after the start of Russia’s war against Ukraine in 2014, Chevron withdrew from the project, and the representation of Chevron B. V. Ukraine announced the cessation of its activities in Ukraine.