Chevron Sole Bidder for Lithuanian Shale Gas License
The Lithuanian unit of Chevron Corp. was the sole applicant for a license to explore for shale gas and shale oil in the Baltic nation in a tender which closed Monday.
Lithuanian officials announced that Chevron Exploration and Production Lietuva, was the only bidder to seek the right to explore for unconventional hydrocarbon reserves 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 accepted, Chevron would also be granted a ten years license to explore for conventional oil in the field.
Lithuanian Prime Minister Andrius Kubilius recented told the media that Lithuania held significant prospects for shale gas.
"Our geological estimates show that Lithuania can hold 480 billion cubic meters (bcm) of shale gas reserves, with recoverable reserves at 120 bcm (billion cubic metres)."
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 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 is hoping that domestically produced gas from shale will reduce it's dependence on imports from Russia's Gazprom. 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.
However, Lithuania’s move towards shale gas and shale oil exploitation is already drawing opposition, as Chevron officials hoped to begin exploration work this year.
"We do not want somebody drilling and spoiling our land when the gas starts to flow," Jonas Nairanauskas, a community leader in the western district of Taurage, told the Lietuvos Rytas daily.
The daily quoted a Minijos official as being surprised by opposition, who commented that it was the first time that such discontent had been expressed.
Related Reading: Chevron Seeking Shale in Lithuania