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Chevron eyes Lithuania shale entry in Silute-Taurage field

Chevron is hoping to enter Lithuania's unconventionals sector, submitting a bid for a shale-gas exploration and extraction rights at the Silute-Taurage field, in the west of the country

Chevron lodged the bid in Lithuania's latest licensing round, which closed on 14 January. A company spokesperson confirmed it was the only bidder for the Silute-Taurage Block. The spokesperson told Petroleum Economist that the Tender Commission was evaluating Chevron's bid for the licence. 

Earlier, an official from the Lithuanian Geological Service told local media that the winner of the Silute-Taurage Block would need to pledge investment of around $31 million. The Kudirka-Kybartai Block was also included in the round. Three bids were lodged for that field. The government is expected to announce awards by March.

Chevron said: "Chevron's primary interest is the unconventional hydrocarbon potential but we will also be evaluating the conventional hydrocarbon potential of the Silute-Taurage Block should our bid be accepted. "We did evaluate but chose not to bid on the Kudirka Kybartai Block."

Chevron has moved to secure 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, the government banned fracking in February after protests over environmental concerns. Chevron still has the right to explore for oil and gas within the 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.

The US Energy Information Administration said Lithuania could hold 113bn cm of technically extractable shale gas reserves.

In 2012, Lithuania's former energy minister, Arvydas Sekmokas, said that the country could have around 100bn cm of extractable shale gas while the head of Lithuania's Geological Survey, Juozas Mockevicius, has been less bullish. Mockevicius told local media he believes the country could have between 30bn and 50bn cm of recoverable resources, but that extraction will be difficult because of environmental concerns over drilling in protected areas. 

Lithuania is keen to reduce its reliance on Russian gas supplies. It consumes around 3.4bn cm of natural gas a year, according to Cedigaz figures. All of its gas is sourced from Russia. 

Jaroslav Neverovic, who became energy minister in December 2012, has said he wants to resolve a long-running dispute with Gazprom over Lithuania's decision to separate its gas supply and transportation from gas utility Lietuvos Dujos, which is controlled by Gazprom.

Gazprom took Lithuania to an international arbitration court in Stockholm to try and prevent the separation. Lithuania responded by launching a counter claim, accusing Gazprom of overcharging it for gas supplies.

Lithuania is also building a liquefied natural gas import terminal, with capacity of 2-3bn cm a year, which presents a further challenge to Gazprom's dominance as the country's main gas supplier. Lithuania hopes the terminal will be up and running by 2014.

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