Archive for August 15th, 2011

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Enough room on the shelf?

August 15, 2011

Blimey.  After years of talk over the past seven or eight years, there is now something close to action relating to the Black Sea shelf and hydrocarbons beneath.

Apart from the usual rather opaque ownership of some rumoured Ukrainian ownership via BVI companies, there are some serious global players lining up either individually, or in joint ventures between themselves of themselves and Ukrainian entities.

Without going into too much detail, simply because I am not sure what is public knowledge and what is not and I wouldn’t want to break any confidences, unsurprisingly Chinese interests have already secured a number of plots on the Black Sea shelf.  A number of the usual corporate suspects are in talks or have made agreements with Gov Ukraine and last week, Brazil, in the form of Petrobras made a formal approach to Gov Ukraine and committed to make substantial investments.

In the meantime TNK-BP are going to play with shale gas in northern Ukraine sometime before 2020 and are prepared to spend up to $2 billion, which considering the additional costs to shale gas exploration, is not really that much.

However, there is now serious attention from almost all the serious international players when it comes to the Black Sea Shelf.  One suspects quite a lot of ink on quite a lot of paper before the parliamentary elections next October (just in case there is a return to political stagnancy as a result).

An area to watch over the next year as undoubtedly once the ink dries on paper, the upstream work will race ahead.  If so, a major political lever held by Russia over Ukraine will start to lose its effect within a decade.

Interesting to see how this progresses.  It certainly has a little more than casual attention of a friend of mine sitting fairly highly in Tatneft.

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