Chevron to explore for shale gas in Lithuania
US supermajor Chevron is to explore for shale gas in Lithuania after buying a 50% stake in a local company with prospective acreage
According to local media, Chevron has acquired an interest in LL Investicijos which owns the Rietavas oil field in northwest Lithuania.
A Chevron spokesperson could not immediately be reached for comment, but the Lithuanian business newspaper, Verslo Zinios, said Prime Minister Andrius Kubilius had confirmed the investment. Chevron has a registered Lithuanina-based subsidiary, Chevron Exploration & Production Lietuva.
As part of the deal, Chevron also has the option of buying the remaining 50% of LL Investicijos. Danish company Jylland Olie previously had a 50% stake in the company while a local businessman owned the remaining interest.
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 Bulgaria, where Chevron owns shale-gas prospective acreage, the government banned fracking in February after protests over environmental concerns associated with fracking. Chevron still has the right to explore for oil and gas within its Novi Pazar field in northeast Bulgaria but only by using conventional drilling techniques.
Chevron has also seen setbacks in Romania, but it is pressing ahead in Poland and Ukraine.
Lithuania hopes to develop an indigenous shale-gas industry to reduce its dependence on natural gas supplies from Russia. Last year the country consumed 3.4 billion cubic metres (cm) of natural gas, all of which came from Russia.
Lithuania launched an international tender for shale-gas exploration licences in June, in which it put two licences up for bidding – the 1,800 square km Silutes-Taurages and 281 square km Kudirkos-Kybartu blocks.
The State Geological Service has estimated recoverable shale resources of between 60 billion and 90 billion cm, based on a 10-15% recovery factor. The US Energy Information Administration has also estimated a similar level of recoverable resources of just over 100 billion cm.
Shale-gas development is part of a broad energy plan that Lithuania hopes will help it cut its reliance on Russian gas imports. The country also plans to build a new nuclear power plant, a liquefied natural gas import terminal and develop renewable energy sources.