Shell, Exxon and Chevron to bid for Ukrainian oil, gas license

Kiev (Platts)--3Mar2006

Ukrainian Prime Minister Yuriy Yekhanurov confirmed this week that the
world's oil majors, including Shell, ExxonMobil and ChevronTexaco, will bid
for a license to extract oil and gas offshore the Black Sea, a government
spokeswoman said Friday.

      The bidding by the majors underscores importance of the project that
Yekhanurov believes may help Ukraine to significantly increase extraction of
natural gas and crude oil within several years. A total of 15 foreign
companies were expected to bid that beside the majors include Hunt Overseas
Oil Company, Petrobras and Tupras, the spokeswoman said.

     $2 BILLION INVESTMENTS

     The government, which is accepting bids through March 24, expects up to
$2 billion will be invested in developing oil and gas fields in the Kerch area
of the Black Sea. Ukraine has been seeking to boost domestic natural gas
output to reduce dependence on energy imports after a showdown with Russia in
early January had led to sweeping disruptions of gas supplies. Analysts said
that Ukraine's explored reserves of natural gas are estimated at about
1 trillion cu m, while undiscovered reserves could be as high as 5 trillion cu
m of gas. Ukraine currently produces 20 bcm/year of gas and 4 million mt/yr of
crude oil, according to the Energy and Fuel Ministry.

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