Italian energy giant
) intends to expand its operations in the Ukraine's shale gas
arena. With this goal, Eni has entered into an agreement with the
country's state-owned national joint stock company Nak Nadra
Ukrayny and independent oil and gas producer Cadogan Petroleum
The agreement gives Eni a controlling interest of 50.01% in LLC
WestGasInvest, which currently has subsoil rights to nine
unconventional gas license areas in the Lviv Basin of Ukraine,
spanning over a total area of about 3,800 square kilometres.
This deal follows the news of Eni, along with its partners,
being outbid by
Royal Dutch Shell
) for acres in the well-known Yuzivska and Olesska areas of the
The Lviv Basin is considered to be among the basins with utmost
potential in Europe for the exploration of unconventional gas.
Further, the appraisal of Lublin Basin in Poland has also attracted
considerable interest from the hydrocarbon industry.
Eni's presence in the Ukraine dates back to 2011 when it signed
the Zagoryanska and Pokroskoe licenses. Located in the
Dniepr-Donetz Basin, Eni operates the licenses along with its
The deal is a major step by the company in its effort to build a
worldwide unconventional portfolio. It will also help Eni to
strengthen its position in Ukraine and provide a base to grow
further in the country.
Eni also holds interest in 3 licenses in Poland's Polish Basin.
Currently, the company is operating in the Polish licenses, and
leveraging its widespread knowledge and proficiency gained through
its joint venture in the Barnett Shale in Texas.
Eni holds a Zacks #3 Rank, which translates to a Hold rating for
a period of one to three months. Longer term, we maintain our
Neutral recommendation on the stock.
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