Chevron exits Lithuania shale gas acreage
After two years the company has closed office in Vilnius
Chevron has exited its prospective shale gas acreage in Lithuania. In an emailed statement the company said: “Chevron can confirm it has closed its office in Vilnius, Lithuania. The company has divested its 50% equity interest in LL Investicijos (LLI).”
The US supermajor bought a 50% stake in a local company, LL Investicijos, which owns the Rietavas oilfield in northwest Lithuania, in 2012.
Tethys Oil said in a separate statement that it had increased its indirect interest in the Rietavas licence, from 14% to 30%, as a result of Chevron’s departure. The Swedish company said the work programme, which is targeting conventional and unconventional hydrocarbons, will continue as planned and is not affected by Chevron’s exit. It added that the programme is fully funded from capital held by the joint venture company LL Investicos. Tethys Oil has indirect interests in three onshore Lithuanian licences: The Gargzdai licence (25%), the Raiseiniai licence (30%) and the Rietavas license (30%).
The US Energy Information Administration estimates that the northeastern section of the Baltic Basin, which covers northern Poland, Lithuania and Russia, holds 6 billion barrels of shale oil and 4 trillion cubic feet (cf) of shale gas in-place. Around 300bn barrels of shale oil and 400bn cf of shale gas are thought to be recoverable. Lithuania’s State Geological Service has estimated recoverable shale reserves of between 2.1 trillion cf and 3.2 trillion cf, based on a 10-15% recovery factor.
Last year the country consumed 95 trillion cf of natural gas, all of which came from Russia. Lithuania’s government is planning another international tender for shale gas exploration licences but has not said when it would take place.
Lithuania’s government wants to reduce its reliance on Russian energy to 55% percent in 2016, down from 90% in 2011. It expects imports of natural gas from Russia will fall by 50% percent when the new LNG terminal becomes operational by the end of 2014. It also plans to build a new nuclear power plant, in Ignalina near the border between Latvia and Belarus, and to develop renewable energy sources.
Over the past three years Chevron has snapped up shale-gas acreage across Eastern Europe, where it sees a combination of resource potential and lucrative gas markets. But the company has seen its exploration in some areas stalled because of opposition to hydraulic fracturing (fracking).
In June Chevron confirmed it had pulled out of its Bulgarian shale gas project and closed its office in Sofia because of political uncertainty surrounding support for shale gas development. The Bulgaria government banned fracking in 2012 following widespread public protests and environmental concerns over fracking.
In 2011 the previous government granted Chevron a five-year permit to explore for shale gas in Bulgaria’s Novi Pazar field in 2011. The government later said Chevron could still explore for oil and gas within the field, in northeast Bulgaria, but only by using conventional drilling techniques.
Chevron has also seen setbacks in Romania, where environmentalists have protested against the company’s test drilling in the Silistea-Pungesti area, in the northeast of the country.