Chevron to prospect for shale gas in Lithuania

OSLO (Reuters) - U.S. energy group Chevron plans to look for shale gas in Lithuania after buying a stake in a local oil company, the prime minister said on Thursday, showing the country hopes to follow neighbor Poland in seeking new supplies.

The government has set energy independence from Russia, its sole gas supplier, as a key goal. The government could be ejected from office after elections and it is not clear what energy path an expected centre-left coalition would take.

"As far as we know, Chevron is entering Lithuania by acquiring shares of one local company to prospect and explore for hydrocarbons, for oil and shale gas production," Prime Minister Andrius Kubilius told a news conference.

"That's a significant event. Our geological estimates show that Lithuania can hold 480 billion cubic meters (bcm) of shale gas reserves, with recoverable reserves at 120 bcm," he added.

Business daily Verslo Zinios reported that Chevron Global Energy had bought 50 percent of Lithuania-registered oil company LL Investicijos, which holds a license to prospect for oil and gas at the 2,400 square kilometer Rietavas field.

Chevron confirmed the report. " ... in the coming months, this company will commence exploration activities in Lithuania on behalf of its owners," the company added.

Chevron has an option to buy the remaining shares in the company, previously 50 percent owned by Danish company Jylland Olie and 50 percent by a local businessman, the newspaper said. It did specify which of the two owners has sold shares.

Poland is also keen to develop its shale gas fields.

Russian gas group Gazprom is the sole gas supplier to Lithuania and plays a major role in many eastern European countries.

The U.S. company also plans to take part in a tender to acquire licenses in two new fields, the newspaper added.

The government called a tender in June for shale gas exploration in a move to cut its energy dependence. The Baltic country consumed 3.4 bcm of gas in 2011, all of which was imported from Russia.

(Reporting by Nerijus Adomaitis and Andrius Sytas in Vilnius; editing by Keiron Henderson)

Source: http://news.yahoo.com/chevron-prospect-shale-gas-lithuania-112549217--finance.html

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