Shell mulls pulling out of Ukrainian shale project

Royal Dutch Shell has been prevented from exploring for shale gas in Ukraine. The oil and gas giant said its commitment under the Yuzivska Production Sharing Agreement (PSA) project has been […]

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By Jacqueline Echevarria

Royal Dutch Shell has been prevented from exploring for shale gas in Ukraine.

The oil and gas giant said its commitment under the Yuzivska Production Sharing Agreement (PSA) project has been suspended for an “extensive period of time due to Force Majeure” – a comment clause in contracts which allows companies to suspend or terminate their obligations due to extraordinary events.

The project has been on hold due to conflicts between Russia and Ukraine.

The Yuzivska PSA is a $10 billion (£6.3bn) deal signed in 2013 between Shell and Ukrainian company Nadra Yuzivska to explore for shale gas in the Yuzivka field.

The project is expected to help reduce the country’s dependence on Russian gas.

A Shell spokeperson said: “Due to the said events, project implementation conditions have been materially changed. Therefore, we have begun discussions with the Ukrainian Government and our partner Nadra Yuzivska LLC on the way forward with the PSA, pursuant to its terms.”