Sunday, August 5, 2012

Ukraine Gets Responses from Exxon Mobil Corporation (NYSE:XOM), Lukoil for Gas, Oil Exploration

Ukraine has received responses from global energy majors such as Exxon Mobil Corporation (NYSE:XOM) and Lukoil for oil and gas exploration in its Black Sea Skifsa filed, a senior minister in the government said on Friday.

Exxon is leading a consortium of companies which include Shell, Petrom and Nadra Ukrainy.

Briefing journalists in Kiev, Ecology and Natural Resources Minister Eduard Stavitsky said, "Two bids have come in for Skifska: there was an individual one from Lukoil Overseas, and Exxon Mobil also made a general bid for a group of companies." He did not give any financial details about the bids.

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Ukraine is seeking to become self-sufficient in its energy requirements and lower its dependence on Russia. It invited bids last June for its fields at Skifska and Foroska.

Eduardo said that no bids have come in for the Foroska field, though the country has no immediate plans to float a new tender for oil and gas explorations there.

The Skifska field has a potential yield of 3-4 billion cubic metres of hydrocarbons, and the Foroska field 2-3 billion cubic metres, a press release said.

Ukraine imports a large part of its energy needs from Russia, but the deals have been marred by disputes over pricing and there have been instances of supply disruption to European customers.

Ukraine imports about two-thirds of its gas from Russia at a price that has been rising steadily for the last few years and is expected to average about $415 per thousand cubic metres this year.

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Russia has agreed to price cuts provided Kiev allows its firm, Gazprom to buy into Ukraine’s gas pipelines, which carry the bulk of Russian gas to Europe, a trade-off Ukraine is not willing to accept.

If the current exploration manoeuvres are successful Ukraine will be able to considerably reduce its energy costs.

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