Shell halts its operations in eastern Ukraine due to security concerns

Stop sign
Source: DollarPhotoClub

Oil and gas giant Royal Dutch Shell has announced that it’s suspending its shale exploration work in eastern Ukraine due to security concerns stemming from the ongoing military operations between Ukrainian forces and pro-Russian separatists.

The company representative told RIA Novosti on Wednesday “Currently we are not conducting drilling in eastern Ukraine. The security situation is such that we are not able to carry out certain activities scheduled by the shale gas production agreement for reasons beyond our control.”

“Hence, we took a step specified in the contract to announce force majeure regarding certain obligations set in the agreement on gas production at the Yuzivka field,” he added.

Force majeure is a clause that frees the company from performing contractual obligations due to causes that are outside of its control, such as war or natural disaster.

The company’s representative also stressed that declaring force majeure does not imply giving up Shell’s gas production in Ukraine. “Shell’s interests in shale gas production in Ukraine remain the same, and we will continue to execute all kinds of operations that we can carry out safely,” the representative noted.

An agreement between Shell and Nadra Yuzivska on shale gas production at the Yuzivka field in Kharkiv and Donetsk regions was signed in January of 2013.

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