This oil giant could get crushed by Ukraine
Once known as the "Breadbasket of Russia", Ukraine is now also Russia's fuel tank. And, one American company has 10 billion reasons to hope nothing goes wrong.
Ukraine sits on 39 trillion cubic feet of natural gas reserves. That's about one-quarter the world's entire proven reserves. One company that has bet big on Ukraine's natural gas is US-based Chevron.
Back in November 2013, the company signed a 50-year deal with Ukraine's ousted president Viktor Yanukovich. The deal involved developing the Olesska shale gas field with $350 million to $400 million spent on exploratory drilling. The total investment would then go up to $10 billion. Ukraine's then-Energy Minster Stavytsky estimated that as much as 353 billion cubic feet of natural gas could be extracted every year. That translates to roughly $1.7 billion in revenues per year on the upper end given current natural gas prices.
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"The Chevron is in the far western portion of Ukraine which is the most pro-EU, pro-West," says Talking Numbers contributor Richard Ross, Global Technical Strategist at Auerbach Grayson. "In relation, the Shell shale is in the eastern part of Ukraine, which is not quite as friendly to the Western businessman. So, I think Chevron has a leg up both technically longer-term and perhaps fundamentally."
http://finance.yahoo.com/blogs/talking-numbers/this-oil-giant-could-get-crush-by-ukraine-200317976.
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