Ukraine has signed a shale gas deal with Royal Dutch Shell - a move seen as an attempt by Kiev to reduce its dependency on Russian gas imports.
A contract, reportedly worth $US10 billion, was signed between Nadra Yuzivska and Shell at Davos on Thursday at the World Economic Forum.
"We have witnessed a great event today. I believe we have become almost relatives," said President Viktor Yanukovych.
The BBC reports Ukraine is believed to have some of the largest shale gas reserves in Europe. New technology means they are more easily recoverable.
Kiev hopes that the deal would help it escape dependence on Russian natural gas.
Ukraine "might even go into surplus," said Energy Minister Eduard Stavytsky.
Shell chief executive Peter Voser said it was a "very important day for Shell".
AAP reports the government estimates the eastern Donetsk location may hold three trillion cubic metres of natural gas - enough to last 70 years at current consumption rates.
Shell will sink 15 exploratory wells in the Yuzovska field in an area of 7,000 square km, according to Natural Resources Minister Oleh Proskuryakov in the Kommersant newspaper.
Rows over price in 2006 and 2009, led to Russia halting gas supplies to Ukraine during a bitter winter, causing temporary gas shortages in a number of European countries.
