Exxon and Shell are in ‘legal limbo’ in the Black Sea following the overthrow of the pro-Moscow Yanukovych regime in Kiev and a vote two days ago in Crimea to split from Ukraine.
Bloomberg reported that Chris Weafer, a partner at Macro Advisory in Moscow, said Exxon and Shell had pursued an “exploration deal with a government which may soon no longer have jurisdiction over the [Crimea] region.”
Exxon and Shell had planned to spend $735 million drilling two wells about 50 miles from the region’s southwest coast, Bloomberg said.
“Exxon sought the rights to drill the Skifska license off Ukraine after discovering the Domino field in 2012 in neighboring Romania, a find large enough to offer that country the prospect of becoming a gas exporter. Exxon Mobil Senior Vice President Andrew Swiger said in an investor presentation last week it still remains interested in getting permission to explore off Ukraine,” according to Bloomberg.
Last year, Italy’s Eni landed an agreement with the prior Ukraine regime to explore about 800 square miles off Crimea’s eastern coast.
CEO Paolo Scaroni said last week he didn’t know how the situation in Crimea would affect the license, Bloomberg said.
Russia has up to 20,000 troops in the Crimea, according to U.S. estimates.
Fewer than 100 wells have been drilled in the Crimean Black Sea, according to data compiled by Bloomberg. There are more than 7,000 in the North Sea.