The activities of Ukrainian energy companies in certain areas of the sea “are of an illegal nature and must be halted,” Russia’s foreign ministry said in a statement sent to reporters. “The areas in question are the subject of a negotiations process between the Russian Federation and Ukraine on the demarcation of the continental shelf and exclusive economic zones in the Black Sea,” it said.

Political ties between Moscow and Kiev are strained because of Russian opposition to Ukraine’s NATO membership bid and disputes over the price at which Russia sells gas to its ex-Soviet neighbor. The foreign ministry statement did not say if the Russian objections applied to US firm Vanco Energy, which has been granted a contract by Ukraine to develop an area of just under 30,000 square km at the northern end of the Black Sea.

Vanco Energy has said it would spend as much as $3 billion on the project, starting with a $190 million investment in the first three years. Moscow and Kiev are in dispute over territorial waters around the Kerch Strait, a waterway at the northern end of the Black Sea which separates Ukraine’s CrimeaPeninsula from the coast of southern Russia. (Reuters)