BP, Chevron, Crimea, Crimea solar, Dneipre, Dnieper, Dnieper-Donets Basin, Dniepr-Donets Basin, gas, Igor Sechin, Igor Sechin Rosneft, Igor Sechin sanction, Medvedev, Moscow, natural gas, oil, oil and gas, Petroleum wars, pipelines, Putin, Rosneft, Royal Dutch Shell, Russia, shale gas, Shell, tight gas, TNK-BP, Ukraine, Ukraine nuclear, Ukraine pipelines, Ukraine solar, Yanukovych, Yuzovska block
Not only has Putin wrenched control of current oil and gas reserves in Crimea; and effectively blocked Ukrainian offshore production, in the Black Sea, but the area besieged in eastern Ukraine, corresponds to the area of the Dnieper-Donets Basin, oil and gas resources. (Furthermore, two of the largest solar power plants, in the world, are located in Crimea.)
It appears that Rosneft, which is majority Russian government owned (69.5%), and 19.75% owned by the British firm BP, was left behind, as Anglo-Dutch, Royal Dutch Shell was given a 50 year oil and gas rights permit over a 7,886 km2 area between the cities of Kharkov and Donetsk in eastern Ukraine. This deal is reported worth at least $10 billion. Shell’s joint venture partner is the local Nadra Yuzivska. According to Friends of the Earth, “Nadra Yuzivska LLC receives half of the profits and 90 per cent of the company is owned by the state. 10 per cent of this company, however, is in the hands of a small shadowy company that has frequently been linked by the Ukrainian media to the Yanukovych faction. There are strong suspicions that the company serves as a cover to channel funds to the Yanukovych family“. According to “Geert Ritsema, head of the energy and natural resources campaign at Milieudefensie: ‘Shell must withdraw its agreement with the Ukrainian state now that Yanukovych has been removed. The Ukrainian people never assented to shale gas. Ukrainians are being doubly penalised by Shell: the environment is being polluted as Shell is dumping toxic waste water into open reservoirs and it also seems that Nadra Yuzivska is being used to funnel money to Yanukovych and his supporters.” (Emphasis our own) See entire article at: http://www.foei.org/en/what-we-do/land-grabbing/latest-news/milieudefensie-foe-netherlands-harmful-shale-gas-deal-between-shell-and-yanukovych-must-be-halted (Viktor Yanukovych is the former President of Ukraine: http://en.wikipedia.org/wiki/Viktor_Yanukovych)
TNK-BP, now Russian gov-BP owned, Left Behind in Tender
“On February 23, 2012 the Ukraine government announced a tender for shale exploration and development in the Oleska and Yuzovska blocks of western and eastern Ukraine, respectively. Shell, ExxonMobil, Chevron, ENI, and TNK-BP initially responded to the tender. In January 2013, Ukraine awarded the first shale gas PSA , signing with Shell at the World Economic Forum in Davos, Switzerland. Shell’s 50-year PSA permit at Yuzovska in the eastern Dniepr-Donets Basin covers an area of 7,886 km2 and assigns oil and gas rights to all strata to a depth of 10 km, including tight and basin- centered gas. The contract allows for 70% investor recovery and a 16.5% government revenue share.” (US EIA, 2013: http://www.eia.gov/analysis/studies/worldshalegas/pdf/fullreport.pdf ) In 2013, TNK-BP was bought by majority state-owned Rosneft. Rosneft is almost 70% Russian government owned (69,5%), and almost 20% BP owned (19,75%) http://en.wikipedia.org/wiki/Rosneft
Map of major shale gas basins all over the world from the US EIA report “World Shale Gas Resources: An Initial Assessment of 14 Regions Outside the United States“, Date, 5 April 2011, Dnieper-Donets Basin tag added by Mining Awareness.
“A single total petroleum system encompassing the entire sedimentary succession is identified in the Dnieper-Donets basin. Discovered reserves of the system are 1.6 billion barrels of oil and 59 trillion cubic feet of gas.” Map from “Petroleum Geology and Resources of the Dnieper-Donets Basin, Ukraine and Russia By Gregory F. Ulmishek , U.S. Geological Survey Bulletin 2201-E , U.S. Department of the Interior U.S. Geological Survey, 2001”
DNIEPR-DONETS BASIN (EAST UKRAINE) – More Details
“Shale exploration is underway in Ukraine…” Among “the main shale targets in Eastern Europe are marine-deposited black shales within the Lower Carboniferous of the Dniepr-Donets Basin (TRR of 76 Tcf and 1.2 billion barrels)… By country, the estimates are Ukraine (128 Tcf and 1.2 billion barrels); Romania (51 Tcf and 0.3 billion barrels ); and Bulgaria (17 Tcf and 0.2 billion barrels). Compared with North America, the shale geology of Eastern Europe is more complex, although faulting appears less prevalent than in other parts of Europe. Compared with North America, the shale geology of Eastern Europe is more complex, although faulting appears less prevalent than in other parts of Europe.
The Ukraine State Service of Geology and Mineral Resources (Gosgeonedra) has announced shale gas resources in the country of 7 trillion m3 (Tm3) or 247 Tcf. However, the basis for this estimate has not been released and the figure includes some tight gas resources. The newly created Geological Research and Production Center in Poltava plans to coordinate shale gas studies in Ukraine, while monitoring water quality in drilling areas. Ukraine’s current Production Sharing Agreement (PSA) involves a 5-year exploration period and up to 45 years for development. Tender fees are modest: $60,000 for the tender and $10,000 for the geologic information package.
On February 23, 2012 the Ukraine government announced a tender for shale exploration and development in the Oleska and Yuzovska blocks of western and eastern Ukraine, respectively. Shell, ExxonMobil, Chevron, ENI, and TNK-BP initially responded to the tender. In January 2013, Ukraine awarded the first shale gas PSA, signing with Shell at the World Economic Forum in Davos, Switzerland. Shell’s 50-year PSA permit at Yuzovska in the eastern Dniepr-Donets Basin covers an area of 7,886 km2 and assigns oil and gas rights to all strata to a depth of 10 km, including tight and basin-centered gas. The contract allows for 70% investor recovery and a 16.5% government revenue share.
Chevron has been in negotiations with the government for a PSA at the Oleska field in western Ukraine. This block is along strike with Poland’s Lublin basin, where Chevron already holds shale licenses. Duration and terms likely would be similar to those granted to Shell” (USEIA, 2013, pp. x3-x4)
DNIEPR-DONETS BASIN (EAST UKRAINE)
2.1 Introduction and Geologic Setting
The Dniepr-Donets Basin (DDB) in eastern Ukraine is a Mid- to Late-Devonian failed rift basin on the Eastern European Craton, Figure X-6. The basin contains a thick sequence of Lower Carboniferous black shale which may be prospective for oil and gas development. Economically important Carboniferous coal deposits and tight sands of the Moscovian overlie these shales, 10 but this coaly sequence does not appear to be a prospective shale target.
The DDB accounts for most of Ukraine’s onshore petroleum reserves and is comparatively well understood, with several thousand oil and gas wells, some of which reached depths of over 5 km. Lower Carboniferous black shales and coal seams are the main s ource rocks, while overlying clastic Carboniferous sandstones provide conventional reservoirs within mainly structural traps. To the northwest the DDB continues into the Pripyat Trough of southern Belarus, which appears to be too shallow and low in TOC for shale development. To the southeast the basin continues into the Donbas Foldbelt of southwestern Russia.
Roughly symmetrical, the DDB is about 700 km long, 40 to 70 km wide, and trends northwest-southeast.11 It comprises a series of half grabens bounded by large- displacement faults (h= 100 m to 2 km). The individual blocks are quite sizeable (50- 100 km by 20-40 km), although numerous smaller faults are locally present. The basin contains as much as 15 km o f Devonian and younger sedimentary rocks, which includes 1 to 2 km of mostly Devonian (Frasnian) salt deposited under restricted rift conditions. Figure X-7 is a structural cross-section showing depth to the L. Carboniferous (L. Visian) black shale as well as salt flows in the basin.
L. Carboniferous black shale overlies the Devonian salt interval. This black shale and the overlying coal seams sourced most of the conventional oil and gas fields in the basin. The entire Carboniferous section ranges up to 11 km thick in the DDB and is up to 15 km deep near its base along the basin axis. In the northwest portion of the DDB the Carboniferous is continental in origin, but transitions into partly shallow marine depositional cycles, each of which is typically 50 m thick and contains an organic-rich shallow marine shale layer.” (p. x11, continues on pp. x12-x15) Excerpted from: “Technically Recoverable Shale Oil and Shale Gas Resources: An Assessment of 137 Shale Formations in 41 Countries Outside the United States, June 2013, (June 13, 2013 – corrected Executive Summary, Table 5) This report was prepared by the U.S. Energy Information Administration (EIA), the statistical and analytical agency within the U.S. Department of Energy.” http://www.eia.gov/analysis/studies/worldshalegas/pdf/fullreport.pdf
About TNK-BP and Rosneft
“TNK-BP was a major vertically integrated Russian oil company headquartered in Moscow. It was Russia’s third-largest oil producer and among the ten largest private oil companies in the world. In 2013 it was acquired by Russian oil company Rosneft.…
Rosneft owns TNK-BP International Limited, which in turn owns 95% of TNK-BP Holding, with the other 5% floating freely on public markets. According to Rosneft’s CEO Igor Sechin, no discussion had been held on a buyout of minority shareholders in TNK-BP Holding.” References and more information: http://en.wikipedia.org/wiki/TNK-BP
“Rosneft (Russian: Росне́фть, IPA: [rɐˈsnʲeftʲ]; MCX: ROSN, LSE: ROSN) is an integrated oil company majority owned by the Government of Russia… In March 2013, after completing acquisition of TNK-BP, Rosneft became the largest publicly traded oil company” It is almost 20% owned by BP, with almost 70% owned by the Russian government. References and more information: http://en.wikipedia.org/wiki/Rosneft
Crimea’s Onshore and Offshore Fields
“Crimea also possesses several natural gas fields both onshore and offshore, all connected to Ukraine’s pipeline system. The inland fields are located in Chornomorske and Dzhankoy, while offshore fields are located in the western coast in the Black Sea and in the northeastern coast in the Azov Sea:…The republic also possesses two oil fields: one onshore, the Serebryankse oil field in Rozdolne, and one offshore, the Subbotina oil field in the Black Sea.” References and more information: http://en.wikipedia.org/wiki/2014_Russian_military_intervention_in_Ukraine#Petroleum_resources
In the following article, Friends of the Earth lays out their very serious concerns about the environmental impacts of fracking. Not only is fracking dangerous, in general, but the drilling fluids-fracking waste water is being held in open, thinly lined reservoirs:
“Milieudefensie / FoE Netherlands: Harmful shale gas deal between Shell and Yanukovych must be halted, ” by Friends of the Earth Netherlands / Milieudefensie — last modified Feb 25, 2014 12:50 PM, AMSTERDAM, 25 February 2014 – “Milieudefensie / Friends of the Earth Netherlands calls on Shell to break off a shale gas deal with Ukraine because of environmental damage and strong suspicions of corruption.” Read entire article and contact here: http://www.foei.org/en/what-we-do/land-grabbing/latest-news/milieudefensie-foe-netherlands-harmful-shale-gas-deal-between-shell-and-yanukovych-must-be-halted
We doubt that Rosneft-BP would do a better job than Shell, however! One need only look at pollution in Russia and off the US Gulf Coast. The solar fields in Crimea, which were effectively kidnapped, and among the largest in the world, were one of the best ways to energy independence for the Ukraine.
We are highly concerned about the Ukraine’s continued dependence on nuclear energy, 28 years after Chernobyl:
“In 2012, Ukraine generated a total of 185 billion kilowatthours (BkWh) of electricity. The country is heavily dependent on nuclear energy—its fifteen reactors generate roughly half of the total electric power supply. Fossil fuel sources (46%) and hydropower (6%) generate the remainder of Ukraine’s electric power, with marginal volumes contributed by wind generation. Most of Ukraine’s primary energy consumption is fueled by natural gas (about 40%), coal (about 28%), and nuclear (about 18%). Only a relatively small portion of the country’s total energy consumption is accounted for by petroleum and other liquid fuels and renewable energy sources.” http://www.eia.gov/countries/country-data.cfm?fips=up
From the USEIA: “16% of natural gas consumed in Europe flows through Ukraine”
“Source: U.S. Energy Information Administration, IHS EDIN, and International Energy Agency, Note: Representations of international boundaries and names are not authoritative. Republished March 14, 2014, 9:30 a.m., to correct an error in the text.
Europe, including all EU members plus Turkey, Norway, Switzerland, and the non-EU Balkan states, consumed 18.7 trillion cubic feet (Tcf) of natural gas in 2013. Russia supplied 30% (5.7 Tcf) of this volume, with a significant amount flowing through Ukraine. EIA estimates that 16% (3.0 Tcf) of the total natural gas consumed in Europe passed through Ukraine’s pipeline network, based on data reported by Gazprom and Eastern Bloc Energy.
Two major pipeline systems carry Russian gas through Ukraine to Western Europe—the Bratstvo (Brotherhood) and Soyuz (Union) pipelines. The Bratstvo pipeline is Russia’s largest pipeline to Europe. It crosses from Ukraine to Slovakia and splits in two to supply northern and southern European countries. The Soyuz pipeline links Russian pipelines to natural gas networks in Central Asia and supplies additional volumes to central and northern Europe. A third major pipeline through Ukraine (Trans-Balkan) delivers Russian natural gas to the Balkan countries and Turkey.
In the past, as much as 80% of Russian natural gas exports to Europe transited Ukraine. This number has fallen to 50%-60% since the Nord Stream pipeline, a direct link between Russia and Germany under the Baltic Sea, came online in 2011.
Natural gas flows through Ukraine vary by season, ranging from almost 12 billion cubic feet (Bcf) of natural gas per day in the winter to only 6 Bcf per day in the summer. An unusually mild winter in 2013 meant reduced natural gas flows through Ukraine and contributed to higher levels of natural gas storage in Europe (natural gas storage levels were 46% full as of March 13, compared to 23% full in the United States).
Source: U.S. Energy Information Administration, International Energy Agency, and Eastern Bloc Energy” http://www.eia.gov/todayinenergy/detail.cfm?id=15411
“Ukraine Signs Drilling Deal With Shell for Shale Gas” By STANLEY REED, Published: January 24, 2013 “Shell’s Ukraine contract covers the Yuzivska field in the Kharkiv and Donetsk regions“. http://www.nytimes.com/2013/01/25/business/global/ukraine-signs-drilling-deal-with-shell-for-shale-gas.html?_r=0
“The Yuzivska gas field is a Ukrainian natural gas field that was discovered in 2010. It will begin production in 2017 and will produce natural gas and condensates. The total proven reserves of the Yuzivska gas field are around 70.8 trillion cubic feet (2000×109m³) and production is slated to be around 960 million cubic feet/day (27.4×106m³). The total exploration investment is expected to range between 250-300 million US$. 
1. “Ukraine sees 2017 for commercial shale gas output”. royaldutchshellplc.com. 2012. Retrieved 2013-05-31.
2. “Kyiv Turns To ‘Unconventional’ Natural Gas To Wean Itself From Gazprom”. rferl.org. 2013. Retrieved 2013-05-31.” http://en.wikipedia.org/wiki/Yuzivska_gas_field
“Skifska gas field
Skifska is a license block located in the Ukrainian zone on the continental shelf of the Black Sea. It was awarded in 2012 to a consortium consisting of Royal Dutch Shell, ExxonMobil, Petrom and Nadra.
Original plans intended to start the exploration programme in 2015 on the block with estimated natural gas and condensates resources in the range of 200 to 250 billion cubic metres (7.1×1012 to 8.8×1012 cu ft). Potential future production contingent to success during the exploration campaign could yield around 550 million cubic feet per day (16×106 m3/d).
Royal Dutch Shell stopped their negotiations over a production sharing agreement in January 2014. Due to the 2014 Crimean crisis the project was put on hold in March 2014.
1. Polityuk, Pavel (2012-08-15). “Exxon, Shell-led group win $10 billion Ukraine gas project”. Reuters. Retrieved 2014-03-28.
2. “ExxonMobil and Shell won bid on Black Sea Skifska gas field”. 2b1stconsulting.com. 2012. Retrieved 2013-04-28.
3. Zinets, Natalia (2014-03-19). “Shell pulled out of gas field talks in Ukraine in January”. Reuters. Retrieved 2014-03-28.
4. “Exxon Mobil puts Ukraine gas prospect on hold”. Dallas News. Retrieved 19 March 2014“. http://en.wikipedia.org/wiki/Skifska_gas_field
For the Solar Installations see: http://en.wikipedia.org/wiki/Perovo_Solar_Park http://en.wikipedia.org/wiki/Okhotnykovo_Solar_Park http://ji.unfccc.int/UserManagement/FileStorage/UX3F1KEC8ZGDTYW4RIO96052MPAQLS
“With Crimea annexation, Putin expands oil and gas empire
Russian President Vladimir Putin signed a bill Friday officially incorporating Crimea as part of Russia. Moscow’s Crimea annexation is a double whammy against Ukrainian energy security – blocking Kiev’s access to Black Sea oil and gas while extending Mr. Putin’s energy dominance in Europe. By David J. Unger, Staff writer / March 21, 2014” Read article here: http://www.csmonitor.com/Environment/Energy-Voices/2014/0321/With-Crimea-annexation-Putin-expands-oil-and-gas-empire
“Russia to raise gas production in Crimea: Medvedev”
Mon Mar 24, 2014 8:58PM GMT
“US, Russia: Friends-turned-foes
Russian Prime Minister Dmitry Medvedev says his country’s energy companies would double gas production in Crimea within the next few years in a bid to secure the strategic region’s energy independence“. Read article here: http://www.presstv.ir/detail/2014/03/24/355916/russia-to-up-gas-production-in-crimea/
“Ukraine and Shell sign ‘$10bn’ shale gas deal”
Read article here: http://www.bbc.com/news/world-europe-21191164