Shell CEO Ben van Beurden. Image courtesy of Royal Dutch Shell.

Royal Dutch Shell has declared a force majeure for an exploration project near the crash site of MH17, the company announced Thursday.

The project is located in the Yuzivska gas field near the region of Donetsk in eastern Ukraine where MH17 crashed.

Shell won its production license for the field in 2012.

Commercial gas production was expected to start in 2017.

Ukraine’s State Geological Service estimated Yuzivska reserves at 2 trillion cubic meters.

The project has been placed on hold.

Shell CEO Ben van Beurden said, “We’ve also declared force majeure as you can imagine simply because we cannot continue the operations there.”

The Anglo-Dutch company has been exploring for shale gas in the Ukraine.

According to the U.S. Energy Information Administration, Ukraine has shale gas reserves of about 42 trillion cubic feet, the third largest reserves in Europe.

In its second quarter results conference call, van Beurden also said it was too early to assess the possible impact of U.S. and EU sanctions against Russia.

“It is easy to think of what has happened and all the events that have followed on from it as a bit of a game changer,” van Beurden said.

“But it is a bit early to say how this will all play out. We are not as exposed to Russia as some of our competitors,” van Beurden added.

Shell also has assets in Russia including a 27.5 percent stake in the Sakhalin-2 offshore oil and gas project, one of the world’s largest liquefied natural gas projects.

Sakhalin-2 is located in the Sea of Okhotsk, off Russia’s east coast.

In 2012, Sakhalin-2 produced 10.9 million tonnes of LNG.


Leave a Reply