Ukraine’s deposits of unconventional gas (shale gas, tight gas trapped in non-porous sandstone
formations, and coal bed methane) may form a significant part of Europe’s gas reserves.
Initial exploration and test drilling will be carried out in two major deposits: Yuzivska (Kharkiv
and Donetsk Oblasts) and Oleska (Lviv and Ivano-Frankivsk Oblasts), to confirm the volume of
the reserves. Shell and Chevron, respectively, won the tenders for the development of these
fields in mid 2012. Gas extraction on an industrial scale is expected to commence in late 2018/
early 2019 at the earliest. According to estimates presented in the draft Energy Strategy of
Ukraine 2030, annual gas production levels may range between 30 billion m3 and 47 billion m3
towards the end of the next decade. According to optimistic forecasts from IHS CERA, total
gas production (from both conventional and unconventional reserves) could reach as much as
73 billion m3. However, this will require multi-billion dollar investments, a significant improvement
in the investment climate, and political stability. It is clear at the present initial stage
of the unconventional gas extraction project that the private interests of the Ukrainian government
elite have played a positive role in initiating unconventional gas extraction projects.
Ukraine has had to wait nearly four decades for this opportunity to regain its status of a major
gas producer. Gas from unconventional sources may lead not only to Ukraine becoming
self-sufficient in terms of energy supplies, but may also result in it beginning to export gas.
Furthermore, shale gas deposits in Poland and Ukraine, including on the Black Sea shelf (both
traditional natural gas and gas hydrates) form a specific ‘European methane belt’, which could
bring about a cardinal change in the geopolitics and geo-economics of Eastern and Central
Europe over the next thirty years
