Royal Dutch Shell is to launch shale gas production in the Yuzivska block in industrial quantities from 2015, according to Ukrainian Prime Minister Mykola Azarov.

"It's hard to overestimate the [value of the] operating agreement Shell and Nadra Ukrainy have signed today," Azarov said at a press briefing in The Hague on Thursday.

He said that Shell was from today starting a lot of work to develop deposits in Ukraine.

"This has been the focus of our talks with Shell's CEO today, and [we've] determined that Shell will produce significant volumes of gas in Ukraine as early as from 2015," he added.

As reported, Ukraine in 2012 conducted three tenders for concluding production sharing agreements on the Yuzivska (Kharkiv and Donetsk regions), Oleska (Lviv and Ivano-Frankivsk regions) and Skifske fields (the Black Sea shelf).

The winners in the tender to develop Skifske deposit was a consortium led by U.S. ExxonMobil (40%, the operator), Shell (35%), Austria's OMV in the face of Romanian subsidiary Petrom (15%) and Nadra Ukrainy (10%).

Donetsk Regional Council on January 16, 2013, agreed a PSA for the Yuzivska deposit, Kharkiv Regional Council approved it on January 17.

The PSA between Ukraine, Shell and Nadra Yuzivska on the Yuzivska block (7,886 square km in Kharkiv and Donetsk regions) was signed on January 24, 2013.

The first 15 exploration wells are to be drilled within the next five years.

Shell started its work in Ukraine in 1992. It is currently engaged in the development and production of hydrocarbons, natural gas supplies, the marketing of fuel and lubricants and the operation of a chain of gas filling stations. Shell employs over 2,000 people in Ukraine.