Chevron has signed an agreement with the Ukrainian government to develop oil and gas in western Ukraine.

On November 5^th, Chevron signed a 50-year agreement to develop oil and gas.   The exploration will take place in the Oleska Block, which is heavy with shale rock deposits.  Ukraine has much to gain if oil and gas are found.   In the past, Ukraine has relied on Russia to import its supply of natural gas and Russia had the power to cut off winter heating fuel whenever it wanted to. By finding a source of its own natural gas, Ukraine can decrease its reliance on Russian natural gas.  This is another example of shale gas technologies that are altering the geopolitics of energy. Traditionally, three countries (Russia, Iran and Qatar) have held about half the reserves of natural gas. But shale is found in many other places, and could undercut the traditional balance of power in the energy markets.

Russia maintains that shale gas causes pollution and is more expensive than gas from traditional deposits that are abundant in Russia.  It also argues that shale gas wells are quickly depleted.  In former Soviet Bloc countries, there is still uncertainty about shale drilling, and many are not convinced that it is in their best interest as fears of polluting water supplies and disrupting local lifestyles are widespread.

Written by Joseph Negaard - Research Assistant

The Agricultural Law Resource and Reference Center

@PSUAgLawCenter

November 9, 2013