Ukrainian President Viktor Yanukovych oversaw the signing of the 50-year production sharing deal Thursday at the World Economic Forum in Davos, Switzerland, calling it “just the beginning.”
Experts believe Ukraine has one of the world’s largest deposits of shale gas — enough to supply the country’s energy needs for decades.
Shell plans to drill 15 test wells into a massive gas field in eastern Ukraine.
Ukraine is widely dependent on exported Russian natural gas for its energy needs. Ukraine says Russia charges too much and is unwilling to renegotiate the price.
Russia insists Ukraine join a Russian-led trade union before it talks about gas prices.
Russia cut gas supplies to Ukraine twice in the past seven years because of price disputes. The cuts disrupted supplies into Eastern Europe in the middle of freezing cold winters.