Shell Inks Exploration Deal with Naftogaz Ukrainy

National Joint Stock Company Naftogaz Ukrainy (NAK) and Shell Exploration Company B.V. (Shell) have signed a cooperation agreement to carry out technical studies leading to joint exploration and production of hydrocarbons in an area of interest in the Dniepr- Donets Basin. According to the agreement, NAK and Shell will embark on a joint study of an agreed area of joint interest, which covers an area of over 30,000 km2 with potential for further enlargement.

According to geological data, the Dniepr-Donets Basin contains significant remaining undiscovered resources of natural gas. The recovery of these undiscovered resources is subject to considerable technological challenges and dependant on the application of modern insights and technology.

Olexiy Ivchenko, Chairman of Naftogaz Ukrainy said:

"Naftogaz Ukrainy is pleased to enter into this agreement with Shell. We believe the combination of the detailed technical and operational knowledge of Naftogaz Ukrainy and access to state-of-the-art technology from Shell will result in mutual benefits and we look forward to a fruitful partnership"

Matthias Bichsel, Head of Exploration of Shell said:

"This cooperation agreement with Naftogaz Ukrainy marks Shell's entry into the Ukrainian upstream. We believe that the combination of NAK's geological and operational strength combined with the application of Shell's technology and insight into similar play settings will lead to the opening up of significant new opportunities to add more integrated gas from the Dniepr-Donets Basin. North -Eastern Ukraine is close to important regional gas markets, so we are excited to be beginning what should be a long and fruitful cooperation with Naftogaz Ukrainy".