Eni Inks Ukrainian Shale Gas Exit

Italy's Eni has agreed terms to exit a shale gas project in Ukraine, AIM-listed Cadogan Petroleum said November 9.

Westgasinvest - owned 50.01% by Eni, 34.99% by Ukrainian state-owned Nadra Ukrayny, and 15% Cadogan - holds five shale gas licences in which Cadogan's share of exploration costs is carried. 

Under the terms agreed, Cadogan will receive $1.715mn cash from Eni and will not exercise pre-emptive rights on Eni’s transfer of its stake to Nadra Ukrayny. The deal remains subject to approval by Ukraine's anti-monopoly regulator but is expected to close in two months.

Eni entered the shale gas project in 2012 but was widely reported to have pulled the plug on investment in the western Ukraine project early in 2014, as the oil price fell and capex worldwide came under increased scrutiny. Production is now negligible on one asset, and is suspended on another pending the renewal of Westgasinvest's expired licence.