Lithuania to Open Tender for Shale Gas Concessions

Lithuania’s State Geological Service is to call an international tender for shale gas concessions this March

The Baltic nation plans to offer two concessions for exploration activities: the Silute-Taurage field comprising about 1,400 square kilometres and the smaller Kudirka-Kybartai field, at 270 square kilometres.

The southwestern region of Lithuania near the border with Poland and with Russia's enclave of Kaliningrad is thought to be rich in shale gas. Reports have circulated that Lithuania has 480 billion cubic metres of shale gas, which could produce 100 billion cubic metres of gas.

However Energy Minister Arvydas Sekmokas said that these estimates were only theoretical considerations, which are not based on geological data.

A study by the U.S. Energy Information Administration said Lithuania could have recoverable shale gas reserves of 113 bcm.

Tender conditions for the Silute-Taurage field include a requirement for experience in the exploration of shale gas, while the tender for the smaller Kudirka-Kybartai field, which is more suitable for exploring conventional oil, requires bidders to have experience in exploration of hydrocarbonates.

Group Lotos SA, which controls Lithuanian oil company Lotos Geonafta, and holds 50 percent ownership of another oil company, Minijos Nafta, said it would take part in the tender.

The Polish group said earlier that it planned to start drilling for shale gas or shale oil in Lithuania.

"We will make the first tests this year," said Pawel Olechnowicz, the president and chief executive of Lotos.  “Let's see what is underground," he added.

"Minijos Nafta will be the first company in Lithuania to explore the shale in Lithuania. We have been working on this for two years already," Thomas Haselton, the CEO of Minijos Nafta, was quoted as saying in media reports.

"Our specific exploration plans with regard to shale this year are to frac one of our existing wells within the shale zones, probably in the spring, and to drill a new well specifically for shale hydrocarbons in the summer or fall of this year," Haselton added.

A separate license to explore shale for hydrocarbons is not required in Lithuania, the government officials said, but there could be environmental requirements to be met in advance of drillings.

Juozas Mockevicius, the head of the State Geological Service, said first results of shale gas exploration were expected in 2014.