“We obviously need to assess the future security situation as it develops because the safety of our own people is our first priority,” the Chief Financial Officer Henry said. “There’s no pulling out, but we take a time out on the actual drilling activity on the ground,” Simon Henry, the Royal Dutch Shell Chief Financial Officer, said in an interview with Bloomberg TV in London on Tuesday.
Shell is taking a “time-out” on exploration work after drilling two wells since the Hague-based explorer signed a production-sharing agreement last year, Simon Henry went on to say.
On January 24, 2013, the Ukrainian government signed a production sharing agreement with the Royal Dutch Shell, the local company Nadra Yuzivska (90% of which belongs to Nadra Ukrainy and 10% to SPK-GeoServis) for prospecting, developing and extracting shale gas at the Yuzivska field. Under the agreement, Shell and Nadra Yuzivska each hold a 50% equity stake in the project.Royal Dutch Shell became the project’s operator responsible for all work under the production sharing agreement.
The initial stage of geological prospecting provides for receipt of seismic data and the drilling of 15 wells on the Yuzivka section.
The minimal volume of investments on the Yuzivka field is valued at 1.6 billion hryvnia (or $200 million). Investments are expected to increase to 30 billion hryvnias ($3.75 billion ) in case of transition to industrial development.
Predicted resources of the Yuzivka field are valued at 4.054 trillion cubic meters of gas. Industrial mining is to start in 2017. The drilling on the Yuzivka field started in 2013.
Pilot testing is scheduled for 2015.