The Energy Consulting Group
A consultancy focused on the upstream oil and gas industry, and specializing in the development of fact based business strategies for E&P companies and service firms.
Our focus is to develop and implement strategies that are practical, sustainable and allow organizations to achieve their full potential. Our consultants have long histories of working closely with senior executive teams of firms of all sizes to help their companies not only be successful, but achieve performance that stands out relative to peers.
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Ukraine At Risk: An Oil and Gas Perspective
Maps and Graphs Illustrating the Crisis in UkraineThe Ukraine conflict is centered on the differences between the eurocentric area in western Ukraine, and the Russian centric area in the eastern Ukraine. These differences were dramatically illustrated when the Russian friendly prime minister was deposed by pro-European protestors in early 2014. Concerns over this change in political leadership, lead Russia to annex the Crimea, and to support a rebellion by eastern Ukraine provinces with majority pro-Russian populations.
The crisis in the Ukraine is obviously a humanitarian disaster, but it also threatens the Ukrainian government strategy of making the country less dependent upon Russia for its energy needs. As the below map illustrates, the annexation of the Crimea essentially transfered the most promising conventional oil and gas region from the Ukraine to Russia, and the separatist movement in the eastern Ukraine threatens the Yuzovsky shale gas license. Indeed,Shell citing the violence in eastern Ukrain, has already suspended operations in the Yuzovsky license area.
Europe beyond the Ukraine is also exposed to the crisis. The primary vulnerability is the potential for disruptions to Russian gas flows. Europe gets about 35% of its gas from Russia, with about 50% of that transiting the Ukraine. The degree of dependncy varies depending on the distance from Russia, As illustrated by the map below, the countries, several eastern European countries depend upon Russian gas for over 50% of energy needs.
Click on the figures for a higher resolution version of the images.
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