Marathon to explore in eastern Ukraine

Ukraine’s state gas monopoly and the U.S. oil company Marathon signed an agreement June 5 that could lead to the extraction of oil and gas in the ex-Soviet republic, the companies said.

Naftogaz Ukrainy and Marathon International Petroleum Ltd., a subsidiary of Houston, Texas-based Marathon Oil Corp., will carry out joint studies of an area covering about 10,000 square miles in the Dnipro-Donets basin, Marathon said in a statement.

According to Naftogaz, the area could hold reserves of about 200 billion cubic meters of natural gas and about 130 million tons of oil.

“We are hopeful that this will lead to a joint effort to explore the resource potential of the (area) and the formation of a long-term, mutually beneficial relationship between Marathon and Naftogaz Ukrainy,” Marathon’s statement quoted its senior vice president of worldwide exploration, Philip G. Behrman, as saying.

Ukraine is highly dependent on Russian natural gas, and a bitter price dispute resulting in Russia temporarily turning off the taps until Kiev agreed to a twofold price increase last year.

Ukraine is believed to have significant gas reserves of its own, but it lacks modern drilling equipment to develop new sources.

—The Associated Press