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Shale Gas: CC and Morgan Lewis lead on $10bn Chevron Ukraine deal

With major international firms angling to position themselves as leaders in the burgeoning shale gas field, Clifford Chance (CC) is advising energy giant Chevron on its $10bn shale gas exploration project with the Ukrainian government, a mammoth geopolitical deal which could see the region end its dependence on natural gas imported from Russia by 2020.

The Magic Circle firm, acknowledged as a top-tier firm in the oil and gas sector, is advising Chevron opposite US firm Morgan Lewis and Ukrainian independent Asters, which are advising the Ukrainian government and developing something of a track record for high value deals having advised Royal Dutch Shell on a similar value shale deal in Eastern Ukraine earlier this year.

Moscow-based business and finance partner and former Dewey & LeBoeuf lawyer Jonathan Hines is leading the Morgan Lewis team advising state-owned Nadra Oleska in connection with the Chevron joint venture, while energy transactions partner David Asmus is also advising.

Morgan Lewis’s recent experience in the region’s oil and gas market also includes advising Itera Oil and Gas over Russian state-owned Rosneft’s acquisition of a 49% stake in the company for $2.9bn in July this year.

Meanwhile for CC, American multinational energy corporation Chevron is one of several major clients in the global shale market, alongside Apache Corporation, Houston-based Noble Energy, oilfield services giant Schlumberger, Halliburton and Baker Hughes.

In recent years Chevron has also turned to Skadden, Arps, Slate, Meagher & Flom for high-end transactional work, with the firm in 2010 advising the energy giant when it sought to expand its shale gas holdings by acquiring Atlas Energy for $4.3 billion.

Besides CC, other UK firms to secure an early foothold in the fledgling industry include Allen & Overy and Norton Rose Fulbright, which in June won leading roles when Centrica acquired a 25% stake of Cuadrilla’s shale gas licences in North West England.

This latest transaction could have huge implications for the former Soviet republic’s push to shed its reliance on Russian energy, as the government has signed a 50-year joint ‘fracking’ venture with Chevron to extract shale gas in western Ukraine, energy minister Eduard Stavytsky confirmed at a press interview in Kiev on Tuesday (5 November).

As the region is reported to have Europe’s third-largest shale gas reserves, it is expected that Chevron will invest $350 million in the first two to three years to explore shale gas in the Oleska field in Western Ukraine, which is located across regions Lviv Oblast on the Polish border and Ivano-Frankivsk, which shares a border with Romania to the south.