Posted on 12/15/2014 6:48:02 AM PST by thackney
U.S. energy major Chevron plans to withdraw from a $10 billion shale gas deal with Kiev, a senior Ukrainian presidential official said on Monday.
Ukraine signed a shale gas production-sharing agreement with Chevron amid great fanfare in November 2013, just months before mass protests in Kiev ousted former president Viktor Yanukovich, plunging the country into a major crisis with Russia.
"There is information that they (Chevron) are planning this decision," Valeriy Chaliy told journalists, referring to a report by local media that Chevron had told the government it was pulling out of the deal.
Chaliy declined to give further details.
Local media said a move by the first post-Yanukovich government to increase taxes for energy companies lay at the root of Chevron's decision.
(Excerpt) Read more at rigzone.com ...
In November, Ukraine’s government informed Chevron it had fulfilled all conditions necessary for the US company to begin exploration and production of shale gas in Ukraine’s west.
“We have sent a letter to Chevron, and now we are expecting a reply within 30 days. We are interested in signing the operation agreement as soon as possible,” Yaroslav Klimovich, head of Nadra Ukrainy, said then. Under the production sharing agreement, Chevron within five years was to complete geology exploration and drilling.
http://itar-tass.com/en/economy/766961
Higher taxes kill business? Who knew??? So lower the tax and keep Chevron. Sounds like a negotiation tactic to me.
Global Energy giant Chevron terminated its contract with Ukraine to extract shale gas in western Ukraine after trying for more than a year to get the government to simplify taxation for this type of business....
“We have just terminated that PSA (product sharing agreement),” says Peter Clark, Chevron’s country manager. “When it was signed, things had to be done, but not all of them got done.”...
But for the agreement to work, Ukraine’s Finance Ministry committed to changing a taxation law and a number of sub-legal acts such as tax forms that would allow this type of complex business to operate more easily. The deadline for those changes ran out on Nov. 18.
OPEC is doing everything they can to suppress any new drilling or exploration by lowering cost of oil and making these efforts as unprofitable. The start up time and costs once prices rise again will be prohibitive. This is a rerun of what they did a few decades ago.
You would think with winter there and Russia there too, Ukraine would move to protect themselves.
Since they are not increasing production, I disagree. Not cutting production to force prices higher is hardly everything they can do.
OPEC has nothing to do with lower oil prices, its the coming American energy independence that has destroyed the oil market and strangle hold OPEC has enjoyed. And the added benefit is we are destroying Russia’s economy along the way.
This wouldn’t help this winter or the next.
Perhaps Chevron doesn’t want to do all that work building the drilling infrastructure, simply to have it taken possession of by the Russians.
Right now, the US is the safest and most lucrative oil/gas/energy environment on the planet ... and OUR girls are hotter.
“Perhaps Chevron doesn’t want to do all that work building the drilling infrastructure, simply to have it taken possession of by the Russians.”
Oil prices are the biggest factor at work here, I think.
Lower oil prices means less capital available for exploration of gas.
As far as “taken possession by the Russians” goes, the UKRAINIANS have nationalized the Russian pipelines. Given the corruption level in Ukraine, they likely fear spending all of that money, and having the same thing happen to them.
I don't agree. Taxes and political instability are the biggest factor from what I see.
Not so sure about the "benefit": poking that dog might bite someone on the ass.
Here we go
A further $15 billion may be needed to bailout the struggling country, on top of the $17-billion loan package the IMF worked out for the troubled country, and Prime Minister Arseny Yatseniuk appealed for Western help to stop a default on Thursday.
Bingo. I was wondering how far along in the thread I’d have to go before I saw the explanation.
In other words.....Chevron has almost “0” chance of getting paid.
CHEVRON signed that deal a few months before the Kiev US-enabled protests. What’s really going on here? Could control of those drilling profits be what the protests and overthrow are all about?
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