Shell halts shale wells in East Ukraine

June 4, 2014

Royal Dutch Shell Plc (RDSA) has halted drilling for shale gas in eastern Ukraine to protect its personnel from clashes between pro-Russian separatists and the Ukrainian army, Bloomberg reported on June 3.

Shell is taking a “time-out” on exploration work after drilling two wells since the Hague-based explorer signed a production-sharing agreement last year, Chief Financial Officer Simon Henry said in an interview with Bloomberg TV in London.

Europe’s largest oil company has an exploration license for the 8,000-square-kilometer (3,100-square-mile) Yuzivska field in the eastern provinces where hundreds of people have died as armed separatists try to split from Ukraine and join Russia. The company’s operations are more exposed that those of Chevron Corp (CVX), which is exploring the Oleska field in western Ukraine.

“We obviously need to assess the future security situation as it develops because the safety of our own people is our first priority,” Henry said. “There’s no pulling out, but we take a time out on the actual drilling activity on the ground.”

Copyright: Bloomberg, 2014