Shell, Chevron in Ukraine Tie-Up - Analyst Blog
May 14 2012 - 9:30AM
Zacks
Two energy behemoths Royal
Dutch Shell plc (RDS.A) and Chevron
Corporation (CVX) have been awarded the exploration rights
for two shale gas fields – Yuzivske and Oleske – in Ukraine. The
total investment for the project is projected to be around $170
million for the Oleske field and $200 million for Yuzivske,
totaling $370 million.
Per the reports of the Ukrainian
state geological service, the Oleske field that spans over 2,316.6
square miles is estimated to hold about 3 trillion cubic meters of
conventional and unconventional, as well as condensed gas deposits.
The other field Yuzivske is likely to have a reserve of 4 trillion
cubic meters of gas.
Together the fields, where
industrial extraction of gas is expected to begin in 2018-2019,
will contribute up to Ukraine’s 10% domestically consumed natural
gas by 2020.
Apart from Shell, Exxon
Mobil Corp. (XOM), and TNK-BP had also forwarded their
bids for the development of the eastern Ukraine located Yuzivske
field. To obtain rights to set up gas production at Oleske, Lviv
region, Chevron edged out the other bidder Eni SpA
(E).
This move highlights Ukraine’s
attempt to capitalize on the booming shale gas scenario and develop
its large untapped resource of shale gas. The establishment of a
strong domestic gas industry will also minimize the country’s
dependence on Russia.
San Ramon, California-based Chevron
is engaged in global oil and gas exploration and production,
refining and marketing of petroleum products, manufacturing of
chemicals, and other energy-related businesses.
The Royal Dutch Shell plc owns one
of the largest integrated oil and gas businesses in the world. The
group has operations all over the world and is involved in various
activities related to oil and natural gas, chemicals, power
generation, renewable energy resources, and other energy related
businesses.
Chevron and Shell, both, currently
retain a Zacks #3 Rank that implies a short-term Hold rating for a
period of one to three months. We are also maintaining long-term
Neutral recommendation on the stocks.
CHEVRON CORP (CVX): Free Stock Analysis Report
ENI SPA-ADR (E): Free Stock Analysis Report
ROYAL DTCH SH-A (RDS.A): Free Stock Analysis Report
EXXON MOBIL CRP (XOM): Free Stock Analysis Report
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