Ukraine To Seek $2 Bn In March By Selling Black Sea Oil Fields

KIEV, Ukraine -- Ukraine will seek at least $2 billion by auctioning licences to extract oil and natural gas in the Black Sea, tapping into rising international demand for fuel to help fund the national budget.

Ukraine wants to raise money and cut its dependence on neighbouring Russia by auctioning exploration licences at the end of March, Prime Minister Yuriy Yekhanurov said.

"We expect to get at least $2 billion as 12 companies have already expressed interest," Yekhanurov said on Sunday in Simferopol, Southern Ukraine, in remarks broadcast by Ukrainian TV channel 1+1 Studio. "We may have another auction in October."

Ukraine depends on fuel imports, mostly from Russia, for about 80% of its energy needs. President Viktor Yushchenko, whose election in 2004 soured relations with his Russian counterpart Vladimir Putin, is eager to reduce Ukraine’s reliance on companies such as Moscow-based OAO Gazprom and OAO Transneft by attracting foreign investment to develop local fields and spending government money on foreign energy projects.

Russia’s OAO Gazprom cut natural-gas supplies to Ukraine last month, forcing Yekhanurov’s government to agree to pay almost twice as much for gas as in 2005.

Source: Bloomberg