LONDON, Nov. 6 (UPI) -- The Ukrainian government extended the terms for a shale exploration license by five years, JKX Oil and Gas announced Thursday.
JKX, which has headquarters in London, said its exploration permit for the Zaplavskoye license was extended through December 2019. The reserve basin surrounds four other areas where the company is working to extract reserves locked in shale.
Ukraine is one of the Eastern European countries rich in shale natural gas. JKX said its production in Ukraine for 2013 averaged 9,731 barrels of oil equivalent per day, an 18 percent increase from the previous year.
By the government's estimates, there may be enough natural gas in shale reserve areas to meet the country's needs without imports. Ukraine, with the help of European negotiators, brokered an interim deal with Russia to secure a discount on gas prices and reliable supplies through the winter in exchange for commitments to repay the billions of dollars in debt owed to Russian gas supplier Gazprom.
Ukraine has said it was trying to lessen its dependence on Russia by working with its neighbors to reverse the direction of natural gas supply lines and by exploiting domestic shale reserves.
In August, JKX said it was reviewing carefully emergency budget legislation that could put new tax burdens on energy companies.
"Scheduling of further exploration drilling is dependent on the lifting of emergency production tax increases and exchange controls," Chief Executive Officer Paul Davies said in a statement.