Chevron Confirms Ukraine Shale Pull Out

Chevron Corp. has confirmed reports that it will not be proceeding with plans to develop shale gas deposits in western Ukraine.

Peter Clark, country manager for Chevron, told the Kiev Post that the company terminated the production agreement because of legislative hurdles in Ukraine.

"We have just terminated that PSA (product sharing agreement)," said Clark, "When it was signed, things had to be done, but not all of them got done."

Chevron said that it had been awaiting for the streamlining of taxation laws to be moved forwards, however a November 18th deadline for an agreement passed without any progress.

Chevron had won exclusive right to explore and eventually produce hydrocarbons in two western Ukrainian regions which reportedly hold an estimated 2.98tn cubic metres of gas reserves.

A production sharing agreement (PSA) between the American company and 'Nadra Oleska', 90 percent-owned by national joint stock company 'Nadra Ukrayny', was signed in November 2013. The agreement would have seen Chevron invest an initial $350m in exploratory work, with future investment potential upwards of $10bn.

Clark said that despite the termination of the contract, the "dialogue with the government is ongoing."