Italy's Eni, working in conjunction with Britain's Cadogan Petroleum, could sink a first prospecting well for shale gas in Ukraine as early as this year, Ukrainian Ecology and Natural Resources Minister Oleh Proskuriakov said at the Ukrainian Energy Forum, organized by the Adam Smith Institute.

"All specialists are receiving the necessary training in Europe. They should stake the first well this year," Proskuriakov said.

Eni chief Paolo Scaroni said last autumn that he saw considerable potential in unconventional gas production in Ukraine.

Eni bought 30% of Pokrovskoe Petroleum B.V. and 60% of Zagoryanska Petroleum B.V. (both based in the Netherlands) from Cadogan in 2011. These two companies own licenses to develop the Pokrovske and Zahorianske oil and gas fields in Ukraine's Dnipro-Donets basin.

In addition, Eni has plans to jointly start exploring shale gas in western Ukraine with Cadogan at the end of this year.

Cadogan and Ukraine's NJSC Nadra Ukrainy completed an agreement to sell 50.01% of the joint venture LLC Westgasinvest, located in the Ivano-Frankivsk region, to Eni at the beginning of October 2012. Cadogan retained 15% of the company.

LLC Westgasinvest currently holds subsoil rights to nine unconventional (shale) gas license areas in the Lviv Basin of Ukraine, totaling approximately 3,800 square kilometers of acreage. The Lviv Basin is considered to be one of the most attractive basins in Europe for the exploration of unconventional gas, being a continuation of the Lublin Basin in Poland which has already attracted substantial interest from the hydrocarbon industry.

According to Ukraine's State Geology and Subsurface Resource Service, Eni has presented a $55-million geological survey program for 2012-2015 to the regulator. Under this program the Italian company will implement four exploration clusters, on each of which it will use vertical and horizontal drilling technology, as well as hydro-fracking.

Ukraine is looking to diversify energy supplies and boost its own gas production. The baseline scenario in the country's updated Energy Strategy to 2030 states gas production will rise from 20 billion cubic meters to 44.4 bcm and that gas imports will fall to 5 bcm.

Ukraine will raise gas production by developing deep-water fields in the Black Sea with estimated reserves of between 4 trillion and 13 trillion cu m, and by producing unconventional gas, including shale, and methane and tight gas.