Ukraine to hold tender to develop Black Sea shelf section under PSA under proposal of U.S. Frontera

Ukraine under a proposal of U.S. Frontera Resources will hold a tender to develop the Black Sea shelf within the Dolphin section located in the northwest of the continental shelf of the Black Sea under a product sharing agreement (PSA).

The respective decision was made by the Ukrainian government on Wednesday.

According to the draft resolution prepared for approval, the text of which Interfax-Ukraine has, the area located in the northwest of the Black Sea continental shelf is 9,772 square kilometers.

Presumably, the minimum investment should reach UAH 1.5 billion. The amount of total investment required to ensure industrial development will be determined by the results of the tender. The state's share in profitable products should be at least 11% of its total volume, the maximum investor's share is 70% of total production.

The term of the PSA is 50 years. The winner of the tender for the development of the shelf section will have to provide a geological study of the subsoil at the section, including the drilling of at least five wells during the first five-year phase of exploration.

Frontera Resources Corporation, founded in 1996, is engaged in the exploration and production of gas and oil. The company's strategy is to search for prospects for the extraction of fossil fuel in the markets of Eastern European countries that belong to the Black Sea basin. The proven natural gas reserves of the company in Georgia amount to about 300 billion cubic meters.