Shell ends talks with Ukraine on Black Sea gas

Anglo-Dutch oil giant Shell said Wednesday it has ended talks with Ukraine and US group ExxonMobil on extracting natural gas in the Black Sea off the coast of crisis-hit Crimea. In September, then-president Viktor Yanukovych said Ukraine had reached a production-sharing agreement with a consortium including Shell, ExxonMobil and state-owned Nadra Ukrainy to tap gas from the Skifski site in the Black Sea. Prior to the popular uprising that toppled Yanukovych last month, Ukraine had been seeking to diversify its reliance on Russia for energy. Shell said in a statement that it terminated negotiations on the Skifski project in January. It said it had hoped to sign the deal in 2012 or 2013. "Regrettably this has not been achieved. Therefore, Shell has decided to focus its efforts and capital on other opportunities in our worldwide portfolio," Shell said. "This decision has no influence on other Shell businesses in Ukraine, including our tight gas exploration ventures. We remain committed to unlock Ukraine's domestic hydrocarbon resources in an environmentally, socially and economically responsible way." The statement did not further explain Shell's decision or say what this meant for the project itself. In an email to AFP, ExxonMobil said: "We remain inteested in the ... license, but are on hold due to current circumstances." Ukraine draws gas off Crimea, but the pro-Russian authorities whoch seized control of the peninsula plan to "nationalise" Chornomornaftogaz, the main energy company in Crimea. Chornomornaftogaz has oil and gas exploration and extraction operations in the Black Sea and Sea of Azov. In 2012, it extracted some 1.2 billion cubic metres of gas.