KIEV -- Ukraine, known more as an oil and gas transit point than as a producer, now says its crude oil reserves make it one of the former Soviet Union's last untapped energy frontiers.
Several independent and multinational companies are eyeing hydrocarbon reserves here that were last touched in the 1970s.
"They had bigger fields to develop in Siberia," said Nelson Meyers, president of Canada-based Trident (88) Exploration Ltd. But "there are a lot of reserves" in Ukraine, she said.
The State Oil and Gas Committee, which says development of Ukraine's oil could one day wean Kiev from Russian supplies, estimates Ukrainian crude-oil reserves at 1.05 billion tons, with one-third of the total in its Black Sea continental shelf.
That would put Ukraine's reserves roughly on par with those of Norway or Algeria.
That is tiny compared to Russia's proven reserves of 6.7 trillion tons, but industry executives say Ukraine's cache is worth a look.
"I'm a geologist and was very surprised at the extent of oil deposits. They're numerous," said Mike Monea, president of Canadian independent oil and gas producer Nautilus and Associates. "The information has never been published in geological circles. They never let it be known."
"Ukraine has lots of oil and gas. It just doesn't have the technology and money," said Rocky Rombs of Canada's Lateral Vector Resources, which is in joint-venture negotiations with Ukrnafta, Kiev's oil exploration monopoly.
Trident, which plans to invest $30 million next year to explore for oil, is one of several independents braving Kiev's red tape and high taxes.
Shell Oil Co. unit Shell Pecten has said it is considering a $1 billion gas pipeline and oil drilling deal, including Black Sea shelf reserves.
The arrival of geophysical firms and independent producers could change the energy game in Ukraine, where existing small oil and gas production levels have declined in recent years.
Ukrainian oil output this year will be flat at 4.2 million tons, while natural gas output will slip to 15.2 billion cubic meters from 18.2 billion last year.
Kiev will import 12.3 million tons of crude oil and 70 billion cubic meters of natural gas this year, mostly from Russia and Turkmenistan, and it had total energy debts of $4.6 billion at the start of this year.
Some independents, nimble enough to handle the challenges of risky places like Ukraine, are already active.
Rombs said Lateral Vector plans to spend $12 million on exploration in the Sumy region of eastern Ukraine next year.
Carpathian Oil, a joint venture between U.S. Laslo and Ukrnafta, and Kashtan Petroleum, a project grouping Fountain Oil Inc. unit UK-RAN Oil Corp. and Ukrnafta, are eyeing reserves in Western Ukraine.
Canada's Fountain Oil Inc. formed a 45-55 joint venture with Ukrnafta in November to further develop the Stynawske field in western Ukraine.
The two sides also have a joint venture to develop the Lelyaky field in central Ukraine, and Fountain recently announced that it awarded a $1.2 million contract to a Croatian drilling contractor for 12 existing wells in the oil field.
JFX Oil and Gas PLC has been working in the Poltava region, while U.S. company Marathon Oil Co., a unit of USX-Marathon Group, has been mulling investments of up to $200 million in the Poltava natural gas field.
Canadian independent Epic Energy Inc. said in June it had completed its initial test production drilling program in the Aktash field in Crimea and that it saw "significant oil potential" in the former Soviet republic.
The deals are new for Ukraine, until recently known more as a key transport link between Russian and European oil and gas markets.
Russia sends as much as 120 billion cubic meters of gas a year to European customers via Ukraine and about 50 billion cubic meters to Ukraine itself. The Druzhba, or Friendship, oil pipeline linking Russia to Eastern Europe runs through Ukraine.
Kiev, trying to show it is serious about attracting investors, has proposed tax breaks to two joint ventures, but operating in this shaky post-Soviet economy remains difficult.
"The Ukrainian government needs to get in place a tax regime that will entice foreign companies to come here," said Rombs.
Nautilus and Associates' Monea, whose firm is considering forming an exploration group to provide cash and technology in exchange for land and licenses, said the tax regime would have to change before the company considered investing.
"Taxes are very high. We have to crunch numbers to see if it's worth investing millions," he said.
Ukraine, a country of 52 million people, has attracted only about $1.2 billion in foreign investment since independence in 1991. Investors complain of vague laws and bureaucratic stumbling blocks.
Several independent and multinational companies are eyeing hydrocarbon reserves here that were last touched in the 1970s.
"They had bigger fields to develop in Siberia," said Nelson Meyers, president of Canada-based Trident (88) Exploration Ltd. But "there are a lot of reserves" in Ukraine, she said.
The State Oil and Gas Committee, which says development of Ukraine's oil could one day wean Kiev from Russian supplies, estimates Ukrainian crude-oil reserves at 1.05 billion tons, with one-third of the total in its Black Sea continental shelf.
That would put Ukraine's reserves roughly on par with those of Norway or Algeria.
That is tiny compared to Russia's proven reserves of 6.7 trillion tons, but industry executives say Ukraine's cache is worth a look.
"I'm a geologist and was very surprised at the extent of oil deposits. They're numerous," said Mike Monea, president of Canadian independent oil and gas producer Nautilus and Associates. "The information has never been published in geological circles. They never let it be known."
"Ukraine has lots of oil and gas. It just doesn't have the technology and money," said Rocky Rombs of Canada's Lateral Vector Resources, which is in joint-venture negotiations with Ukrnafta, Kiev's oil exploration monopoly.
Trident, which plans to invest $30 million next year to explore for oil, is one of several independents braving Kiev's red tape and high taxes.
Shell Oil Co. unit Shell Pecten has said it is considering a $1 billion gas pipeline and oil drilling deal, including Black Sea shelf reserves.
The arrival of geophysical firms and independent producers could change the energy game in Ukraine, where existing small oil and gas production levels have declined in recent years.
Ukrainian oil output this year will be flat at 4.2 million tons, while natural gas output will slip to 15.2 billion cubic meters from 18.2 billion last year.
Kiev will import 12.3 million tons of crude oil and 70 billion cubic meters of natural gas this year, mostly from Russia and Turkmenistan, and it had total energy debts of $4.6 billion at the start of this year.
Some independents, nimble enough to handle the challenges of risky places like Ukraine, are already active.
Rombs said Lateral Vector plans to spend $12 million on exploration in the Sumy region of eastern Ukraine next year.
Carpathian Oil, a joint venture between U.S. Laslo and Ukrnafta, and Kashtan Petroleum, a project grouping Fountain Oil Inc. unit UK-RAN Oil Corp. and Ukrnafta, are eyeing reserves in Western Ukraine.
Canada's Fountain Oil Inc. formed a 45-55 joint venture with Ukrnafta in November to further develop the Stynawske field in western Ukraine.
The two sides also have a joint venture to develop the Lelyaky field in central Ukraine, and Fountain recently announced that it awarded a $1.2 million contract to a Croatian drilling contractor for 12 existing wells in the oil field.
JFX Oil and Gas PLC has been working in the Poltava region, while U.S. company Marathon Oil Co., a unit of USX-Marathon Group, has been mulling investments of up to $200 million in the Poltava natural gas field.
Canadian independent Epic Energy Inc. said in June it had completed its initial test production drilling program in the Aktash field in Crimea and that it saw "significant oil potential" in the former Soviet republic.
The deals are new for Ukraine, until recently known more as a key transport link between Russian and European oil and gas markets.
Russia sends as much as 120 billion cubic meters of gas a year to European customers via Ukraine and about 50 billion cubic meters to Ukraine itself. The Druzhba, or Friendship, oil pipeline linking Russia to Eastern Europe runs through Ukraine.
Kiev, trying to show it is serious about attracting investors, has proposed tax breaks to two joint ventures, but operating in this shaky post-Soviet economy remains difficult.
"The Ukrainian government needs to get in place a tax regime that will entice foreign companies to come here," said Rombs.
Nautilus and Associates' Monea, whose firm is considering forming an exploration group to provide cash and technology in exchange for land and licenses, said the tax regime would have to change before the company considered investing.
"Taxes are very high. We have to crunch numbers to see if it's worth investing millions," he said.
Ukraine, a country of 52 million people, has attracted only about $1.2 billion in foreign investment since independence in 1991. Investors complain of vague laws and bureaucratic stumbling blocks.