Reuters: Poland Lotos says may be interested in shale gas in Lithuania

Polish energy company Lotos said it might be willing to explore for shale gas in Lithuania, provided the conditions on offer are improved, after Chevron pulled out as the sole bidder in a tender for a license.

The Baltic Basin, which extends from northern Poland to southwestern Lithuania through Russia's Kaliningrad exclave is seen as one of the most promising regions for shale gas exploration in Europe.

"Yes, if conditions are acceptable," Lotos Chief Executive Pawel Olechnowicz told Reuters, when asked whether Lotos would be interested in taking part in a new tender.

Lotos controls most of Lithuania's oil production through full ownership of two small oil companies and a 50 percent stake in a third, all of which hold conventional oil licenses. Chevron said when it withdrew that changes to law had made the license less attractive.

Lithuania's environment ministry formally cancelled the shale gas exploration tender last week but said another one could be called after revising the legal framework.

Lithuania media speculated that one reason Chevron withdrew could have been proposals in parliament to double a tax on shale gas production to 40 percent.

"I have no problem with taxation at 40 percent," Olechnowicz said on the sidelines of an energy conference.

For Lotos, the issue is the terms for the early stages of the license before oil is produced, he said. "We don't want to be obliged to pay much money before production starts.  MORE