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Royal Dutch Shell Uncertainty in Ukraine

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*Three days after Russian diplomats assured the West that Russia will not invade Ukraine, Russia … invaded Ukraine.

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By John Donovan

Screen Shot 2014-02-10 at 16.29.29In 2012 Shell won a license to start commercial production at the Yuzivska gas field in eastern Ukraine. A year ago then Royal Dutch Shell CEO Peter Voser signed a contract to drill for natural gas in Ukraine.

In January of this year, following negotiations between RDS Chairman Jorma Ollila and the then Prime Minister of the Ukraine, Shell expanded its plans for the Ukraine.

All of these deals were agreed while Viktor F. Yanukovich was President of the country.

Unfortunately for Shell the corrupt President is now deposed and hiding in Russia under the protection and control of Putin.

And Voser, knowing that a firestorm of bad news was about to engulf Shell – profits decline, abandoned projects, fire sale of assets etc – prudently decided on a lifestyle change. Or perhaps he also was deposed?

Seems these developments were all unforeseen by Shell scenarios team.

The dire news coming from the Ukraine adds to the growing uncertainty surrounding Shell projects dogged by misfortune.

If the Russians end up running the Ukraine, at least Shell has plenty of experience in dealing with the Russian mafia, including Putin.

And Shell could supply fuel for the tanks as it did for the Nazi war machine in the run up to World War 2.

RELATED ARTICLE PUBLISHED BY THE MOTLEY FOOL ON 2 MARCH 2014: 5 Reasons War in Ukraine Should Worry You

Extract

*Three days after Russian diplomats assured the West that Russia will not invade Ukraine, Russia … invaded Ukraine.

Oil companies
Largely dry on the oil front, Ukraine is believed to have ample reserves of natural gas, particularly in shale formations, and in offshore regions surrounding the Crimea. Major exploration companies including Royal Dutch Shell (NYSE: RDS-A) and Chevron Corp. (NYSE: CVX) have signed agreements to conduction exploration in the country, while ExxonMobil (NYSE: XOM) is believed to be close to signing an agreement of its own. Bloomberg puts the value of these agreements at upwards of $10 billion — all now at risk from conflict in the country.

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1 Comment on “Royal Dutch Shell Uncertainty in Ukraine”

  1. #1 Ivan Byrne
    on Mar 3rd, 2014 at 13:29

    I was doing some research on a radical political party in the Ukraine called S voboda. They are on Facebook and there are several stories and Youtubes out about them. They were against fracking but got a very large donation from Royal Dutch Shell Oil. They only had 5% of the Ukranian vote at the time of the donation. Very curious that Shell Oil would donate to this party. Several xxxxxxxxxx.com sites show these contributions. But it’s not mentioned and most there don’t even know that their party received the contributions from Shell Oil. Comment by John Donovan. I have deleted the name of the .com website referred to in this comment because it leads to a dating site. I cannot vouch for any information contained in this posting.

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