Lithuania: Decision on Shale Gas Tender Deferred
The winner of the tender for shale gas exploration in the western Lithuania will be announced in the latter part of March.
Lithuania’s Commission for Hydrocarbon Resource Exploitation was scheduled to meet today with the widely held expectation that Chevron Corp. would be announced the winner of January's shale gas exploration tender.
However, Lithuanian Prime Minister Algirdas Butkevicius announced that the meeting had been deferred to permit the completion of work being undertaken by Academy of Sciences.
“Now this issue has been postponed until Mar. 19 since the Academy of Sciences has obliged to submit its findings until that day. Yet we have to understand that there might be fighting on sites if exploration works were to be launched there,” said the PM.
On Tuesday, protesters demonstrated in central Vilnius against possible exploration by Chevron. Butkevicius said that shale gas exploration and production would not take place without local approval, stating that he has told Chevron’s representatives that it “has to work with the local community, which is against [exploration]. “
Chevron Exploration & Production Lietuva, the Lithuanian unit of Chevron Corp. was the sole applicant for a license to explore for shale gas and shale oil in the Silute-Taurage field. The bid required the commitment to spend a minimum of 80 million litas ($31 million) in exploration of the 1,800 square kilometre field in located in western Lithuania near the Baltic Sea. If the bid is approved, Chevron would also be granted a ten years license to explore for conventional oil in the field.
In October, Chevron took a 50 percent holding in Lithuania-registered oil company LL Investicijos, which holds a licence to prospect for oil and gas at the neighboring 2,400 square km Rietavas field.
UAB Minijos Nafta, a unit of Polish oil company Lotos, began searching for shale gas and shale oil in May with the drilling of the Skomantai-1 well on the Gargzdai license onshore, Kalnaliai village near Sveksna in Silutes District.
The Academy of Sciences will submit its findings to the parliament (Seimas) around mid-March. The parliamentary Committees on Economics and Environment Protection plan to consider these conclusions at a joint meeting on Mar. 13.
Experts believe that Lithuania may possess between 30 and 50 billion cubic meters (bcm) of shale gas suitable for production. The KPMG Shale Gas Potential Index placed Lithuania as fourth most prospective attractive countries for shale gas production in CEE (after Poland, Romania, and Ukraine) due to its potentially significant reserves and favorable investment environment.
Lithuania, which imports around 3 bcm of natural gas from from Russia's Gazprom, is hoping that domestically produced gas from shale will reduce it's dependence on imports.
Last October, the Lithuanian government decided to bring a lawsuit to arbitration in Stockholm against Gazprom. Lithuania claims that it has overpaid for Russian gas by about €1.45 billion since 2004.