Prime Minister hopes Chevron will return to Lithuania

Lithuanian flag on a table
Source: DollarPhotoClub

Algirdas Butkevicius, Prime Minister of Lithuania, revealed in an interview that he plans to visit the U.S. in order to meet with Chevron representatives. He intends to discuss shale gas exploration and production in Lithuania. Mr Butkevicius plans to inform Chevron officials of the new taxation proposals regarding shale exploration.

On Wednesday, Mr Butkevicius announced that the Ministry of Environment submitted to the Government a draft law concerning Taxation of Shale Gas Exploration and Extraction – the Baltic Course reports.

The new law was drafted after studying shale gas exploration activities in Romania, Great Britain and Poland and it proposes a changed base gas extraction tax rate of 12 per cent for conventional hydrocarbons with no differentiation based on extraction site or annual extraction volume. A 15 per cent rate would apply to unconventional hydrocarbon shale. A zero tax rate was proposed for the duration of three years since obtaining the shale licence but no longer than 1 January 2020. Additionally, 90 per cent of the payable tax rate will be transferred to the state budget with the remaining 10 per cent redirected to the relevant local authority where the drilling takes place.

Mr Butkevicius clearly believes that the new energy bill may entice Chevron – which pulled out of Lithuania in July this year – to reconsider exploring for Lithuanian shale. A new tender for shale gas exploration in Lithuania will be put out in the autumn of this year.

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