Terry Macalister
Thursday November 22 2007
Shell is to become a partner of Regal Petroleum, a company with an unfortunate history of legal wrangles, executive departures and dud wells. The Anglo-Dutch group has signed a deal to buy a 51% stake in Regal’s Ukrainian gas fields for $50m (£25m).
Shell will become operator and invest the first $360m to develop the Mekhediviska-Golotvschinska and Svyrydivske gas fields, whose ownership was recently the subject of a Ukrainian court challenge.
“The memorandum of understanding is another important step in Shell’s development in Ukraine,” said Patrick van Daele, general manager, Shell Ukraine exploration & production, which already controls other operations in the Dnieper-Donetsk basin where the Regal fields are located.
The Aim-listed Regal, founded by its former chairman and chief executive Frank Timis, received its production licence for the Ukrainian assets in June 2004, but in 2005 a Kiev court ruled that the licence was not valid.
Regal lost two appeals against the ruling before trying, with a British Virgin Islands-registered firm, Alberry, to try to get the licences upheld. Late last year, Regal announced all actions had been dismissed by the Ukrainian supreme court.
Regal has had a rocky ride with investors since early 2005 when it announced that a field off the coast of Greece, which it previously said contained significant resources, had shown nothing but water when drilled. Its shares fell 60% in a day.
Timis, a colourful Romanian with two convictions for possessing heroin in Australia in the 1990s, according to a Regal prospectus, remains that company’s largest shareholder.
http://www.guardian.co.uk/business/2007/nov/22/oil2
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