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Upon completion of exploration works in the Kharkiv region, major Ukrainian natural gas extracting company Ukrgazvydobuvannya and multinational oil and gas company Shell have decided to terminate their joint gas project in view of the project’s economic infeasibility.
As reported by Ukrainian weekly magazine Novoe Vremya, Shell announced it has already started preparations for dismantling and removing two exploratory wells in Kharkiv Oblast: Beliayivska-400 (Pervomaisky region) and Novo-Mechebylovska-100 (Blyzniukovsy region).
"Now, Shell and Ukrgazvydobuvannya are discussing the process of the contract termination," the companies have said in the statement.
Shell signed the agreement on joint activities with JSC Ukrgazvydobuvannya in 2006 and renewed it on September 1, 2011. The agreement provides for exploration and production of hydrocarbons in the territory of the Kharkiv region.
The initial stage of exploration involves drilling of 2-3 exploratory wells in the next few years. Drilling of the first exploratory well Beliayivska-400 started in October 2012 and ended on September 16, 2013. Site preparation for drilling the second exploratory well Novo-Mechebylovska-100 began in June 2013, and drilling was completed in March 2014.