How do you protect oil rigs from one of the most advanced maritime militaries in the world? While that challenge might be a question for highly specialized military and security experts, it became a significant concern to British-Dutch Shell, American Chevron and Italian ENI when they were considering a Production Sharing Agreement with Ukraine scheduled for February 2014.
Conversations between Exxon Mobile, Shell and OMV regarding deep water deposits in Skifske were well under way when the Ukraine political crisis erupted in November 2013. When Russia seized Crimea and claimed its territorial sea, Ukraine’s commercial partners walked away.
Populations and advocates have long argued against sacrificing lives for oil. More recently, environmental advocates suggest all energy production from carbon sources should cease, or life as we know it will end. We might suggest that “life as we know it” is dependent on carbon energy sources, and commercial/scientific efforts to clean up existing infrastructure and transportation options are certainly available.
We trust such cleaning efforts are a better alternative to completely ending trade and use of petroleum and gas products, and suggest that the economic benefits of its oil and gas reserves will be a significant boon to Ukraine and Ukrainians. The US has a presence in the Black Sea, but perhaps inadequate to protect Ukraine oil infrastructure enhancements given the Russian presence.
The array of products that oil and gas refineries produce is broad: well beyond energy products that heat our homes and power our transportation. Managing production, distribution and sales of such products from Ukraine oil and gas infrastructure is a big data challenge and beyond the scope of this blog entry, but certainly protection of these resources from Russian exploitation is a key component of economic prospects for Ukraine.