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WorldEuropeNaftogaz negotiates with ExxonMobil, Halliburton and Chevron on Ukrainian energy investments

Naftogaz negotiates with ExxonMobil, Halliburton and Chevron on Ukrainian energy investments


The chief executive of a state-owned Ukrainian energy company this week spoke to executives of major players in the U.S. upstream and downstream oil and gas markets – ExxonMobil, Halliburton and Chevron – to try to convince them to participate to the Kiev-led initiative. energy projects. According to the Financial Timesthe Ukrainian authorities hope to attract foreign investment in their energy sector.

The talks with major U.S. players are part of Kiev’s strategic plan to increase natural gas production, which Ukrainian officials say could help replace Russian supplies in Europe in years to come.

Aleksey Chernyshov, chief executive of Naftogaz, told the FT about meetings he had this week with the management of Halliburton and ExxonMobil in Washington. According to him, the meeting with Chevron executives took place in January.

“We understand that it is quite difficult for private companies to participate in projects implemented during the war,” he said in an interview with the Financial Times. — We are working on insurance mechanisms to protect their investment capital. It will surely take time. But we don’t wait, we act.”

Chernyshov said he also met with White House officials, members of the House of Representatives and senators from both parties in recent days to mobilize more political support for U.S. investments in Ukraine’s energy sector.

The country’s energy infrastructure has suffered from Russian missile attacks led by Moscow throughout the past year. The Russian bombings targeted energy infrastructure. As a result of one of the strikes, the country’s main oil refinery suffered serious damage – the Kremlin is thus trying to weaken the Ukrainian economy.

Ukraine has long since begun to promote its potential in the field of gas exploration and production in the West. In particular, we are talking about the imminent prospects for increasing shale gas production in the Kharkiv, Poltava and Transcarpathia regions.

Naftogaz said it hoped to capitalize on American expertise in onshore shale drilling that has made America the world’s largest oil and gas producer.

Lower energy demand in Ukraine amid economic turbulence following the Russian invasion means the country may also have natural gas reserves that could be shipped to Europe, as well as storage that could be exploited as European stocks build up before winter.

Also, promising projects for offshore natural gas extraction in the Black Sea off the coast of Crimea are known. But this idea can only be realized after the end of the war. The Russian Navy took control of most Ukrainian territorial waters after the invasion and blockaded Ukrainian ports, allowing grain to be shipped only in accordance with a UN-brokered agreement.

Naftogaz hopes to sign a contract with Halliburton soon that will increase production to 13.5 billion cubic meters of gas this year, about 1 billion cubic meters more than in 2022. Chernyshov noted that before the end of war, it is difficult for the Ukrainian state enterprise to meet long-term production obligations.

“To do that, we may need to seriously expand the services and technology factors that Halliburton is able to provide,” Chernyshov said. – We want them to expand (their presence) considerably. We want them to come to us seriously and for a long time.

At present, Halliburton oil services company has little presence in the Ukrainian market. Company representatives have not yet responded to the FT’s request for comment on Chernyshov’s statements.

Negotiations with Exxon and Chevron – oil producers that do not currently operate in Ukraine – are at an early stage and will take longer to conclude. Naftogaz declares itself open to the conclusion of various agreements.

“We can jointly produce gas by entering into a production sharing agreement – they can get a license and produce (gas) independently, we will only welcome that.”

Chevron and Shell signed shale gas deals with Ukraine years ago, before the 2014 revolution, but pulled out after market conditions changed with the annexation of Crimea and war pro-Russian separatist in the Donbass.

Exxon representatives declined to comment on the talks. Chevron has not yet responded to a request for comment.

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