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Ukrainian government rejects shale gas deal with Dutch Yuzgas

Xinhua, November 3, 2016 Adjust font size:

The Ukrainian government has decided not to support the production sharing agreement (PSA) with Dutch company Yuzgas B.V. on the exploration of shale gas deposits in the Yuzovska field in eastern Ukraine, Prime Minister Volodymyr Groysman said on Wednesday.

The decision was adopted at the request of Ukrainian Coal and Energy Minister Igor Nasalyk, Groysman said during a cabinet meeting, without making public the reasons for the move.

In the same time, he instructed the cabinet to provide the Yuzgas firm and the Ukrainian state company Nadra Yuzovska, which runs the Yuzovska field, with a letter explaining the motives behind the cabinet's decision.

Some local experts have suggested that the government has rejected a PSA with Yuzgas as the Dutch company was seeking a share of 90 percent in the project, giving Ukraine only 10 percent.

The Yuzgas B.V., which was set up by Emerstone Energy investment fund, has won a bid for shale gas exploration in Ukraine in July.

A month later, the Dutch company voiced the readiness to invest 200 million U.S. dollars within the next five years into the development of the Yuzovska field.

The Yuzovska field, located in the Kharkov and Donetsk regions, has estimated reserves of between 3 trillion and 4 trillion cubic meters of gas. Endit