US Chevron Considers Retreat from Shale Gas Project – Ukraine

Senior Ukrainian official Valeriy Chaliy announced on Monday that US energy giant Chevron considers to retreat from the shale gas project that had been agreed in November 2013.

Ukraine reached an agreement with Chevron shortly before the anti-government protests in Kiev toppled then President Viktor Yanukovich and ensued in the ongoing conflict in the east of the country.

Chaliy told journalists that Chevron had informed the government of its plans to withdraw from the USD 10 billion project, not disclosing any further details.

Ukrainian media pointed to the decision of the incumbent government to increase taxes for energy companies as the main cause for the withdrawal of Chevron.

Chevron in Kiev refused to confirm Chaliy's comments, London-based spokesperson saying that it was too early to comment as Chevron had only submitted its response to the government.

The agreement provided for the long-term development of the Olesska field in western Ukraine with Chevron initially investing USD 350 million for exploration work in the first 2-3 years.

This is one of the two major agreements for shale gas extraction, which are aimed at decreasing Ukraine's energy dependence on Russia.

The other deal which had been agreed with Royal Dutch Shell earlier, could also be at threat, as the gas deposits are close to the eastern territories which are currently controlled by the pro-Russian separatists.

Chevron announced earlier this year that it was still interested in the shale gas project, but since then the conflict has escalated and claimed the lives of more than 4 700 people.

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