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Kiev, Moscow eye Black Sea development

  |   June 22, 2011 at 6:17 AM

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KIEV, Ukraine, June 22 (UPI) -- Officials at Ukrainian energy company Naftogaz announced they started setting up a joint venture with Russia's Gazprom to explore the Black Sea shelf.

Gazprom approached Naftogaz with the idea of forming a joint venture last year as both sides sought to overcome acrimony that exposed vulnerabilities in the regional energy sector. Gazprom, which supplies gas to Europe, cut gas supplies through Ukraine briefly following contract disputes in 2009.

Naftogaz Chairman Yevhen Bakulin said there were obstacles in setting up the joint venture but bilateral work could focus on developing the Black Sea shelf. But he told Russia's state-run news agency RIA Novosti talks had started.

Opposition leaders in Kiev, however, claim moving too close to Russian companies puts the former Soviet republic back in the Kremlin's direct sphere of influence.

Portions of the Black Sea shelf hold about 380 billion cubic feet of natural gas. Ukraine doesn't have the technology to exploit most of the reserves and has focused its technology on pulling minerals from waters west of Crimea.

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