By: Peter M. Duncan
ExxonMobil and Ukraine’s state-run energy oil company Naftogaz signed a preliminary agreement on exploring and developing shale gas deposits in the Ukraine. This partnership means that the Ukraine will be able to lessen their dependence on Russian imported oil, alleviating recent arguments over price.
Two years ago, a pricing fall-out between Moscow and Kiev halted Russian gas flow to Europe for about two weeks, spurring a European quest for new suppliers.
The U.S.-based Energy Information Administration states that the Ukraine’s shale gas reserves are estimated to be 42 trillion cubic feet (1.2 trillion cubic meters); making them Europe’s fourth largest, behind Poland, France and Norway.
This agreement is but the tip of the proverbial iceberg for Europe-following a global trend towards relying on shale gas to answer the world’s energy needs. The global value of shale gas production is expected to grow to over $56 billion by the year 2020.
While financial details were not disclosed, Naftogaz did indicate that they have, or plan to sign deals with Shell and Total.
I’m thrilled to see Europeans embracing shale gas drilling as the next wave of our energy future. I think that if the drilling success of the United States is considered, the rest of the world has nowhere to go but up–or down, if it’s with the drillbit!