Lithuania: Chevron Officially Granted Shale Gas Exploration Rights in Lithuania

Lithuania has finally confirmed that it will proceed with the granting of rights to Chevron Corp. to explore for shale gas in western part of the country.

Chevron Exploration and Production Lietuva was the sole applicant in a tender for a license to explore for shale oil and gas in the 1,800 square kilometre Silute-Taurage prospect, which Lithuanian experts estimate may hold up to 80 billion cubic metres (bcm) of technically recoverable shale gas.

The multinational committed to spending a minimum of 80 million litas ($31 million) in exploration on the 1,800 square kilometre field located in western Lithuania near the Baltic Sea in exchange for a seven-year permit. Chevron would as well be granted a ten years license to explore for conventional oil in the field.

Chevron has a 50 % 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.

Officials said that the government plans to formalize Chevron's win later in September, with the exploration arrangement to be signed by the end of this year. The government had before postponed the decision next public protests by local communities, who fear the chemicals used in hydraulic fracturing could pollute underground waters.

UAB Minijos Nafta, a unit of Polish oil company Lotos, has been searching for shale gas and shale oil 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 nations for shale gas production in CEE (next Poland, Romania, and Ukraine) due to its potentially significant reserves and favorable investment environment.

Lithuanian Prime Minister Andrius Kubilius said that geological estimates showed that Lithuania can hold 480 billion cubic meters (bcm) of shale gas reserves, with recoverable reserves at 120 bcm (billion cubic metres).

However, the approval will likely increase activity by opponents to Lithuania’s move towards shale gas and shale oil exploitation. Local communities are strongly against unconventional gas development have organized rallies in Vilnius.

"We do not want somebody drilling and spoiling our land at the same time as the gas starts to flow," Jonas Nairanauskas, a community leader in the western district of Taurage, told the Lietuvos Rytas daily.

Prime Minister Algirdas Butkevicius has said that shale gas exploration can only commence with the approval of the local communities approve.

However, other officals have been less sensitive to citizen concerns. Nerijus Udrenas, chief economic advisor to President Dalia Grybauskaitė, said that shale protesters were "misguided" and posing a threat to Lithuania becoming a prosperous country on a par with Norway.

Udrenas described some of the protesters as having been wilfully misguided by others who ulterior motives for the protests.

"Their emotions are guided by selfish people who have certain narrow goals," he said.