Eni SPA is withdrawing its controlling interest from a group that holds five shale gas licenses in Ukraine, reports partner Cadogan Petroleum PLC, London.
Cadogan said Eni will pay it $1.715 million for a commitment not to exercise preemptive rights to the Italian company’s transfer of a 50.01% of Westgasinvest LLC to state-owned Nadra Ukrayny, holder of 34.99% of the consortium.
Cadogan also is to transfer its 15% share of Westgasinvestment to Nadra Ukrayny for nominal consideration as well as its interest in the company operating the Debeslavetska and Cheremkhivsko-Strupkivska gas licenses, where production is negligible.
Cadogan Chief Executive Officer Guido Michelotti welcomed the chance to withdraw from gas operations he called “subeconomic under the current 70% royalty regime.”