16.08.2012
Government announces winning bid in offshore gas exploration tender

The government awarded the winning bid in a tender to explore the Skifska offshore gas fields in the Black Sea to a consortium of ExxonMobil, Royal Dutch Shell, OMV and Ukrainian state-owned company Nadra. The consortium offered to pay a $325m signature premium and give the state a 25% share of profit gas after initial investments have been recouped. No bids were submitted for the other field, Forosska, but the government plans to revise its terms and announce a new tender. (Interfax)

Dragon Capital comments on the news: The Skifska tender became Ukraine’s third oil and exploration project in which global energy majors were granted exploration and production rights (tenders for two other projects, Yuzivska and Olesska onshore shale gas fields, were completed in May). We find the news very positive for Ukraine’s long-term energy security, though the short-term impact will be minor and mostly seen in additional budget revenues from the premiums paid the winners. According to government estimates, gas output from Skifska may peak at 3-4 bcm p.a. on top of the 13 bcm potential production from the Olesska and Yuzivska fields.

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