Shell signs MOU for Ukrainian gas licenses

Shell E&P Ukraine signed a nonbinding MOU with Regal Petroleum to acquire licenses for the Mekhediviska-Golotvschinska and Svyrydivske gas fields in Ukraine.

Nov. 26, 2007

Uchenna Izundu
International Editor

LONDON, Nov. 26 -- Shell Exploration & Production Ukraine Investments (I) BV signed a nonbinding memorandum of understanding with Regal Petroleum PLC to acquire licenses for the Mekhediviska-Golotvschinska and Svyrydivske gas fields in Ukraine.

According to the agreement, Shell will pick up a 51% interest for $410 million in Regal Petroleum (Jersey) Ltd., a wholly owned subsidiary of Regal Petroleum, which indirectly has the licenses. Shell would assume operatorship of the fields in the Dniepr Donetsk sedimentary basin where most of Ukraine's gas and condensate production is located.

Patrick van Daele, general manager of Shell Ukraine E&P 1 LLC, said the deal would help to build the company's profile in Ukraine because of the growth potential from the fields.

"The negotiations, which are exclusive to Shell and Regal, are subject to due diligence and final transactional documentation. If successfully completed, the MOU builds on Shell's position in the Dniepr Donetsk basin," Shell said. The parties expect to conclude the agreement within 8 weeks.

Contact Uchenna Izundu at [email protected].