UKRAINE BUSINESS NEWS - SIX ARTICLES - U.S.-Ukraine Business Council (USUBC)

UKRAINE BUSINESS NEWS - SIX ARTICLES

Ukraine talks shale gas with Texas - Chevron, ExxonMobil, Shell; World Bank $200 million energy loan; Houston business luncheon; Concert in Washington; SoftServe; Vanco

U.S.-Ukraine Business Council (USUBC)
Washington, D.C., Thursday, May 19, 2011

INDEX OF ARTICLES ------
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1. UKRAINE LOOKS TO TEXAS FOR AN ENERGY PATH
Talks shale gas to Texas, Ukraine’s negotiations with Chevron, ExxonMobil & Shell
By Andrew E. Kramer, The New York Times, New York, NY, Wed, May 4, 2011

2. WORLD BANK FINANCING TO HELP UKRAINE REDUCE ENERGY INTENSITY 50 PERCENT BY 2030
The World Bank, Washington, D.C., Tue, May 17, 2011

3. UKRAINIAN BUSINESS & INVESTMENT LUNCHEON & ROUNDTABLE," HOUSTON, TEXAS AND OPENING OF "ANCIENT UKRAINE: GOLDEN TREASURES & LOST CIVILIZATIONS"
Luncheon, Houston, Texas, 12:15 to 2:30 p.m.; Exhibition opening at Houston Museum of National Science, Houston, TX, Fri, June 3, 2011, 6:00 p.m.
U.S.-Ukraine Business Council (USUBC), Washington, D.C., Thursday, May 19, 2011

4. UKRAINIAN SPRING IN WASHINGTON: COMMEMORATIVE CONCERT
Famous Ukrainian folk singer, Nina Matvienko, Tuesday, May 24, 7:00 p.m., Montgomery College
Embassy of Ukraine to the USA, Washington, D.C., Thursday, May 19, 2011

5. SOFTSERVE RENEWS GOLD CERTIFIED PARTNER STATUS IN THE MICROSOFT PARTNER NETWORK
SoftServe Inc., Fort Myers, Florida, Monday, May 16, 2011

6. UKRAINE, VANCO REACH BLACK SEA OIL SETTLEMENT, INTERFAX REPORTS
By Kateryna Choursina, Bloomberg, Kyiv, Ukraine, Apr 13, 2011
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1. UKRAINE LOOKS TO TEXAS FOR AN ENERGY PATH
Talks shale gas to Texas, Ukraine’s negotiations with Exxon, Shell and Chevron

By Andrew E. Kramer, The New York Times, New York, NY, Wed, May 4, 2011

NEW YORK - By drilling in the scrubland and vacant lots in and around the city of Fort Worth, American energy companies have demonstrated that they can produce natural gas economically from shale — a form of sedimentary rock previously considered all but worthless.

Now, despite environmentalists’ opposition to the water-polluting potential of the shale-gas extraction method known as fracking, the technology’s proponents are heading abroad. And Ukraine, which sits atop tantalizingly large shale deposits, is eager to do business.

Already this year, Ukraine has opened talks with three Western energy giants — Exxon Mobil, Chevron and Shell — to search for shale gas. Ukraine’s Parliament has also passed investor-friendly legislation aimed at opening its domestic natural gas market to shale gas producers.

Meanwhile, the nation’s president, Viktor F. Yanukovich, has signed a shale-gas exploration agreement with the United States and reached an accord with the European Union on energy transport that opens Ukraine’s pipeline system to Western companies.

Along with the energy companies courting it, Ukraine sees shale as potentially altering the geopolitics of natural gas, lessening global reliance on Russia and the Middle East. Today, just three countries — Russia, Iran and Qatar — hold 54 percent of the world’s conventional gas reserves. But shale is found in many other places, including Eastern and Western Europe, India, China and Australia.

A 2009 study by the International Energy Agency estimated the world holds nearly as much gas recoverable through new techniques like shale gas, or another known as coal-bed methane, as through the traditional sort obtained by conventional drilling. The agency estimated there might be 380 trillion cubic meters of natural gas that could be recovered through these new techniques, compared with 404 trillion cubic meters obtainable through traditional means.

The energy agency has also predicted that unconventionally produced gas will rise from 12 percent of the global total in 2008 to 19 percent in 2035.

Although Ukraine already produces some natural gas by conventional means, it remains highly dependent on imports from Russia’s state-owned gas monopoly, Gazprom, the world’s biggest producer. Twice in the last five years, Gazprom has halted supplies to Ukraine in politically tinged pricing disputes.

And yet, as a legacy of the Soviet era, Ukraine controls the pipelines through which Gazprom transports its natural gas to its Europe. It is a mutual dependence that at times seems more like a standoff: Russia has the gas; Ukraine has the pipes.

Ukraine, by finding a greater source of its own natural gas, would be hoping to reduce Russia’s leverage in that relationship.

The shale gas industry, for its part, could erode Russia’s once seemingly untouchable monopoly pricing power on natural gas, if the industry can duplicate Fort Worth-scale results from a belt of shale deposits in Poland and Ukraine that in some cases lie right under the pipelines carrying Gazprom’s gas.

Right now, Russia produces about 40 percent of the natural gas imported into the European Union, selling it mostly under long-term contracts that are linked to the price of oil — which has been soaring lately.

Gazprom says its average wholesale price in Europe in the first quarter of 2011, the latest figures available, was $346 for 1,000 cubic meters. By comparison, the benchmark price for natural gas in the United States at the Henry Hub in Louisiana last month averaged $153.30 for the same volume.

Ukraine’s national energy company pays 30 percent less than the European rates, through an agreement Mr. Yanukovich signed last year to let Russia use a naval base on the Crimean Peninsula for 25 years. But that is still higher than the price in the United States.

“Unconventional gas will be a game-changer throughout Europe,” said James Hill, vice president at BNK Petroleum, one of the companies that pioneered the technology in the United States and is now expanding in Europe. “We’re the mouse that roared.”

Poland is three or so years ahead of Ukraine in its shale gas industry, with exploration wells already drilled. But it is less sensitive to Gazprom’s monopoly, because Poland consumes far less gas than Ukraine. And Poland is geographically less critical for the transmission of natural gas to Western Europe than Ukraine, which transports about 80 percent of Gazprom’s exports to Europe.

Ukraine has four major, largely unexplored shale deposits, according to Valerii Berezhnoi, chief geologist for Vikoil, a Ukrainian seismic exploration company studying unconventional natural gas deposits. Nobody pretends to know how much gas they might hold. But as energy companies speculate on Ukraine’s potential, they point to the deposits that lie under Fort Worth, called the Barnett Shale.

Production from Barnett has grown in a decade from almost nothing to 133 million cubic meters a day. That is more than the approximately 109 million cubic meters that Ukraine imports a day from Russia. Signaling a shift toward support for shale gas development, Ukraine’s minister of energy and coal, Yuri A. Boiko, met with American shale gas executives in Houston this year and announced a once far-fetched sounding goal for Ukraine to become self-sufficient in natural gas.

“We understand that American science is rich in this field,” Mr. Boiko told an audience of mostly Western energy company executives at a conference on shale gas in Kiev last month — the first such gathering for the industry in Ukraine. “We would like to attract this technology, and we would like to attract partners,” he added.

Exxon Mobil, which bolstered its unconventional gas expertise with the purchase of the American shale developer XTO last June, signed a memorandum of understanding with the Ukrainian government earlier this year, formalizing negotiations to begin exploring or drilling. XTO was a pioneer of the Barnett shale play under Fort Worth. Ukrainian officials are now in similar talks with Chevron and Shell.

Shale, the ossified mud from the bed of ancient seas, is prized if it is stained dark gray or black from imbedded organic material. A shale gas strike has none of the drama of an oil gusher. Drilling teams pull core samples to the surface. If rich in gas, the rock will fizz gas in water, like an Alka-Seltzer.

Companies produce industrial volumes of shale gas through hydraulic fracturing — or fracking. The process releases natural gas from shale by blasting the rock with water, sand and chemicals to create cracks through which the gas flows.

Because fracking often produces wastewater laced with toxic substances, it has become a target of environmental protests worldwide. In France, the National Assembly next week will debate a proposal to ban the practice, as opposition heats up ahead of a presidential election next year.

So far in Poland, protests have been small. Because the industry is in its infancy in Ukraine, the public’s attitude there is still mostly unknown.

Jack P. Williams, the president of Exxon’s XTO Energy unit, told a conference last fall that realizing shale gas’s potential abroad will depend on addressing environmental concerns in the United States.

“Getting this right is vital not just to U.S. jobs and energy supply,” he said, “but also to our ability to pursue these same opportunities globally.”

Gazprom, meanwhile, has so far been silent on Ukraine’s negotiations with Exxon, Shell and Chevron. In fact the company’s officials rarely mention shale gas in public. A Gazprom spokesman identified remarks made in a speech by the chief executive, Aleksei B. Miller, to a business convention in Cannes last year, as the most comprehensive so far.

In that talk, Mr. Miller dismissed the technology as environmentally unsound and expensive, and said that shale gas would affect only the margins of Gazprom’s business — characterizing shale as merely an appetizer to Gazprom’s main course.
“If you fell for foie gras,” he told the audience in France, “it does not mean that buttery soft tenderloin steaks grilled to your taste are made redundant.”

More recently, shale gas wildcatters at the Kiev conference said they could not be more pleased with Gazprom’s behavior. By keeping natural gas prices in Ukraine and elsewhere in Europe higher than gas prices in the United States, they said, Gazprom is making shale exploration in Eastern Europe look all the more profitable.

Clifford Krauss contributed reporting from Houston.

LINK: ttp://www.nytimes.com/2011/05/05/business/global/05shale.html?pagewanted=2&_r=2

NOTE: Chevron, ExxonMobil and Shell are members of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.

The World Bank, Washington, D.C., Tue, May 17, 2011

WASHINGTON, D.C. - The World Bank’s Board of Directors today approved a US$200 million oan for the Energy Efficiency Project in Ukraine. The loan will finance investments in energy saving measures in industrial companies, municipalities and municipally owned enterprises and energy service companies.

The Project will contribute to helping Ukraine achieve its ambitious targets to reduce energy intensity by 20% by 2015 and by 50% by 2030. It will also contribute to decreasing Ukraine’s dependence on imported gas, hence mitigating energy supply security risks and decreasing the cost of energy supply.

“The potential for energy efficiency in Ukraine is enormous. If the country were to reduce its energy intensity to the level of Poland it could reduce its energy consumption by about one third. This could translate into a reduction of at least 30% in the consumption of natural gas,” said Martin Raiser, World Bank Country Director for Ukraine, Belarus and Moldova.

The investments will have environmental and broader social benefits as well. The Project will help reduce CO2 emissions by at least 1 million tons annually. And it is expected to contribute to job creation, both directly and indirectly through the benefits of increased cost competitiveness resulting from less energy intensity.

The project is a Financial Intermediary Loan to UkrEximBank as borrower which has a successful track record of lending to industrial companies for energy efficiency projects. UkrEximBank will lend directly to industrial and municipal energy efficiency projects. In addition, UkrEximBank will onlend the funds to Participating Banks (PB) to create a financial market for energy efficiency projects.

The types of energy efficiency investment sub-projects fall into six broad categories:

modernization of inefficient and obsolete equipment/facilities;
installation of highly energy-efficient industrial equipment and processes for new production capacities whose current energy use considerably exceeds current best practices;
utilization of waste gas and heat and excess pressure from industrial processes;
improvement of industrial systems which involves a suite of measures to increase energy efficiency;
energy loss reduction in municipal sector enterprises (largely focusing on district heating); and
energy loss reduction in buildings.

The Bank has supported Ukraine in its efforts to reform and restructure its energy sectorthrough policy dialogue, technical assistance and financing of adjustment and investment projects since the early 1990s, including two Hydropower Rehabilitation Projects, Power Transmission Project, Kyiv District Heating and Kyiv Public Buildings Energy Efficiency Projects, Coal Sector Adjustment Loan and Coal Sector Pilot Project.

The World Bank is also working with the Government and other international financial institutions to provide technical assistance in restructuring of the gas sector with an objective to facilitate investments in gas modernization.

Since Ukraine joined the World Bank in 1992, commitments to the country total about US$7.0 billion for 38 operations.

Contacts: In Washington: Jonathan Daly, (202) 473-2588, This e-mail address is being protected from spambots. You need JavaScript enabled to view it , in Kyiv: Victor Zablotskyi, (380) 44-490-6671, This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

For more information, please visit: www.worldbank.org.ua. Visit us on Facebook: http://www.facebook.com/worldbank. Be updated via Twitter: http://www.twitter.com/worldbank.
For our YouTube channel: http://www.youtube.com/worldbank.
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3. UKRAINIAN BUSINESS & INVESTMENT LUNCHEON & ROUNDTABLE," HOUSTON, TEXAS AND OPENING OF "ANCIENT UKRAINE: GOLDEN TREASURES & LOST CIVILIZATIONS"
Luncheon, Houston, Texas, 12:15 to 2:30 p.m.; Exhibition opening at Houston Museum of National Science, Houston, TX, Fri, June 3, 2011, 6:00 p.m.

U.S.-Ukraine Business Council (USUBC), Washington, D.C., Thursday, May 19, 2011

WASHINGTON, D.C. - YOU ARE INVITED TO ATTEND the "Ukrainian Business & Investment Luncheon & Roundtable" in downtown Houston, Texas and the opening of the Ancient Ukraine: Golden Treasures & Lost Civilizations: Ukraine Exhibition" at the Houston Museum of Natural Science, on Friday, June 3, 2011.

The "Ukrainian Business & Investment Luncheon and Roundtable," will be held from 12:15 p.m. to 2:30 p.m. at the Petroleum Club of Houston, 500 Bell Street, #4300. The gala opening of the "Ancient Ukraine: Golden Treasures & Lost Civilizations" exhibition will be held at the Houston Museum of National Science, www.hmns.org, 5555 Hermann Park Drive, Houston, TX 77030 from 6:00 p.m. to 8:45 p.m.

The "Ukrainian Business & Investment Luncheon & Roundtable" will feature a panel of top business leaders whose companies are doing business and investing in Ukraine. Panelists will include:

Sergey A. Taruta, leading Ukrainian businessman, philanthropist and chairman, Industrial Union of Donbass (ISD), www.isd.com.ua/en/, one of the largest private companies in Ukraine;
Michael Bleyzer, Founder and President, SigmaBleyzer, www.SigmaBleyzer.com, Houston, TX, one of the largest private equity investors in Ukraine.
Kerry Tassopoulos, Vice President, Government Relations and Compliance, Mary Kay Inc.
Gene Van Dyke, Chairman, CEO & President, Vanco Exploration Company
Andrew A. Pidgirsky, Partner, Adams and Reese LLP.

Morgan Williams, Director, Government Affairs, Washington Office, for the SigmaBleyzer private equity investment management group, who serves as President of the U.S.-Ukraine Business Council (USUBC) will moderate the business luncheon and the panel of business experts roundtable.

HOUSTON LUNCHEON COORDINATING COMMITTEE - ANDREW PIDGIRSKY
The chair of the Coordinating Committee in Houston for the "Ukrainian Business & Investment Luncheon & Roundtable" is Andrew A. Pidgirsky, Partner, Adams and Reese LLP, Houston. Andrew represents the Ukrainian American Bar Association (UABA), http://www.uaba.org/, on the Board of Directors of the U.S.-Ukraine Business Council (USUBC) and is a member of the USUBC Executive Committee. Andrew Pidgirsky can be contacted at 713 308 0138, mobile: 713 492 6183, e-mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

The Ukrainian business luncheon and roundtable in Houston, Texas is sponsored by the over 160 members of U.S.-Ukraine Business Council (USUBC), www.usubc.org. The Ancient Ukraine exhibition is sponsored by The Foundation for International Arts and Education (FIAE), www.fiae.org, a member of USUBC, and the Houston Museum of Natural Science, www.hmns.org.

You will not want to miss the exciting events taking place in Houston, Texas on Friday, June 3, 2011. Please send this invitation to the representatives of your companies and organizations who work in the Midwest/Southwest part of the USA and invite them to attend these special events in Houston, TX.

SCHEDULE OF EVENTS ----
Friday, June 3, Houston, Texas

1. "UKRAINIAN BUSINESS & INVESTMENT LUNCHEON AND ROUNDTABLE"- 12:15 p.m. p.m. to 2:30 p.m. - at the Petroleum Club of Houston, 500 Bell Street #4300., Friday, June, 3, 2011.

2. OPENING: "ANCIENT UKRAINE: GOLDEN TREASURES & LOST CIVILIZATIONS," 6:00 - 8:45 p.m., Houston Museum of Natural Science, 5555 Hermann Park Drive, Houston, TX 77030, Friday, June 3, 2011.

RSVP: Attendees are welcome to attend one or both of the events. Please register your attendance at Event 1 (luncheon) and at Event 2 (exhibition) as soon as possible to Morgan Williams, This e-mail address is being protected from spambots. You need JavaScript enabled to view it . Additional information about the business & investment luncheon will be distributed shortly.
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4. UKRAINIAN SPRING IN WASHINGTON: COMMEMORATIVE CONCERT
Famous Ukrainian singer, Nina Matvienko, Tuesday, May 24, 7:00 p.m., Montgomery College

Embassy of Ukraine to the USA, Washington, D.C., Thursday, May 19, 2011

WASHINGTON, D.C.. - On the occasion of the 20th anniversary of the independence of Ukraine, the Embassy of Ukraine to the United States of America and Eminence Dance, Inc. invite you to the annual commemorative concert.

You have a unique opportunity to enjoy enchanting Ukrainian melodies performed by famous folk singer Nina Matvienko. Experience the rich Ukrainian musical culture and explore an exhibition of traditional costumes as well as souvenirs, all in an atmosphere of fun, humor, and heartfelt hospitality.

Nina Mytrofanivna Matviyenko, a Ukrainian singer, People's Artist of Ukraine, was born on October 10, 1947 in village of Nedilytse, Yemilchyne Raion, Zhytomyr Oblast at the time in the Ukrainian SSR in the Soviet Union. She completed her studies in Ukrainian philology at the Kiev University in 1975.

In 1968 she entered the vocal studio of the Ukrainian State Folk Choir named after Hryhory Veriovka and soon became a soloist. In 1988 she received the Shevchenko National Prize, a Ukrainian State prize named after Taras Shevchenko.

Her repertoire includes numerous Ukrainian folk songs. Nina is the first performer of works by the composers Yevhen Stankovych, Myroslav Skoryk, Iryna Kyrylina, Hanna Havrylets and many others. She has performed on television in numerous films and on radio.

From 1966-1991 she was a soloist of the Ukrainian State Folk Choir. From 1968 a member of the folk trio "Zoloti kliuchi". In recent times she has been performing with the Kiev camerata orchestra, and the Kostyantyn Chechenya Early Music Ensemble.

She has performed in Mexico, Canada, the United States, Czechoslovakia, Poland, Finland, Korea, France, Latin America. She has numerous recordings of Ukrainian folk songs.

WHEN: Tuesday, May 24, 7:00 p.m.

WHERE: Robert E. Parilla Performing Arts Center, Montgomery College, 51 Mannake Street, Rockville, MD

FOR MORE INFORMATION: Tickets can be reserved through the numbers 202-465-6465 and 410-935-0225 or the e-mail This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
http://www.mfa.gov.ua/usa/en/announce/detail/4125.htm.

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5. SOFTSERVE RENEWS GOLD CERTIFIED PARTNER STATUS IN THE MICROSOFT PARTNER NETWORK

SoftServe Inc., Fort Myers, Florida, Monday, May 16, 2011

FORT MYERS, FL - SoftServe Inc., a leading global provider of proven high quality software development, testing and consulting services, is proud to announce that the company has successfully renewed the Microsoft Partner Network status for 2011.

The acquired gold competencies are for Software and Web Development; and the ten silver competencies include ISV, Mobility, Software Development, Web Development, Desktop, Server Platform, Project and Portfolio Management, Content Management, Digital Marketing and Midmarket Solution Provider certifications.

The Microsoft Partner Network is a community focusing on the creation of innovative solutions that drive profitability and sustain competitive advantage. Its gold and silver competency awards are a confirmation of the company`s consistent capability and commitment to build trusted and mutually advantageous relationships with its partners.

As a Microsoft Gold Certified Partner since 2004, SoftServe was chosen as a Finalist of the global Microsoft Partner of the Year Award Program in 2006 and 2007. The company was also awarded Microsoft’s Partner of the Year in Central and Eastern Europe in 2008 (Mobility Solutions) and 2009 (Information Worker).

“It`s not by chance that our company earned numerous technical competencies from Microsoft this year,” commented Serhiy Kharytonov, EVP/CTO Consulting Services of SoftServe, Inc. “They serve as proof of SoftServe’s outstanding expertise in software development based on Microsoft technologies, as well as our unique ability to provide specific, relevant and world class skill sets to our customers. We are proud to have met all the strict program requirements and welcome the diverse expertise, training and certifying opportunities that being a part of Microsoft Partner Network brings.”

Apart from Microsoft Partner Network, SoftServe, Inc. is an active member of Adobe Solution, Cisco, Oracle, VMware, Dell, HP, IBM, Kentico and Intel® partnership programs.

About SoftServe Inc.
SoftServe is a leading global provider of proven high quality software development, testing and consulting services. We are committed to bringing the best commercial software to independent software vendors and enterprises. We combine our unmatched experience with best practices delivering SaaS/Cloud, Mobility and SDLC innovative solutions. With an onshore/offshore delivery model, we collaborate with our customers helping them drive their business and differentiate themselves within their markets.

SoftServe has successfully completed over 2,500 projects for over 150 global companies. Founded in 1993, SoftServe is headquartered in Fort Myers, Florida, with an award-winning development organization based in Ukraine and the Philippines. For more information, please visit www.softserveinc.com.

NOTE: SoftServe is a member of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.
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6. UKRAINE, VANCO REACH BLACK SEA OIL SETTLEMENT, INTERFAX REPORTS

By Kateryna Choursina, Bloomberg, Kyiv, Ukraine, Apr 13, 2011

KYIV - Ukraine and Vanco Prykerchenska Ltd. have reached a settlement on Black Sea oil exploration, Interfax-Ukraine news agency reported, citing Justice Minister Oleksandr Lavrynovych. The document is to be approved in a Stockholm court, Interfax cited Lavrynovych as saying.

Ukraine’s government, led by then-Prime Minister Yulia Tymoshenko, revoked Vanco’s permit to explore for hydrocarbons in the Black Sea in April 2008. The government said the license was issued illegally and that the company wouldn’t have enough money to finance the project. Vanco appealed the decision in Stockholm’s court.

To contact the reporters on this story: Kateryna Choursina in Kiev at This e-mail address is being protected from spambots. You need JavaScript enabled to view it ;

LINK: http://www.bloomberg.com/news/2011-04-13/ukraine-vanco-reach-black-sea-oil-settlement-interfax-reports.html.

NOTE: Vanco Exploration Company is a member of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.

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