Fracking

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Fracking An Alternative to Alternatives?
UkraineIrina Paliashvili, RULG-Ukrainian Legal
GroupKiev and Washington, D.C.

• According to international experts Ukraine may
  hold the largest Shale Gas and Tight Gas reserves
  in Europe.The legislation of Ukraine and the
  Government were not prepared for this
  opportunity, but are now catching up!Until
  recently Shale Gas was not even included in the
  list of natural resources of national
  significance, but now it is added to this list.
  It is also added, along with other Unconventional
  Hydrocarbons, to the list of natural resources
  eligible for Production Sharing Agreements (PSAs).

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Fracking An Alternative to Alternatives? Ukraine

• There is no special legislation applicable to
  Shale Gas (and to other Unconventionals), but
  recently special provisions were added to the oil
  gas, subsoil use and PSA legislation.
• In particular, in a PSAs made for Unconventional
  Hydrocarbons the parties can establish specific
  provisions, which may differ from the legislation
  applicable to conventionals, and which will
  prevail in case of a conflict. At the same time
  not much attention is paid to regulating the
  environmental aspects of Shale Gas development,
  while this issue became very political.

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Fracking An Alternative to Alternatives? Ukraine

• The Government is hoping that development of
  Shale Gas and other Unconventionals will
  contribute to energy independence of Ukraine and
  encourages foreign investment. Two PSA Tenders
  already took place in 2012, with one PSAs for
  Yuzivska area signed with Shell, and the other
  one being negotiated for the Olesska area with
  Chevron. The announcement of a new PSA Tender
  for Slobozhanska area is expected soon. A joint
  project between NAC Nadra and Eni and Cadogan is
  under way for Shale Gas development in Western
  Ukraine for the total area of 3.8 square
  kilometers.

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