As a result of the declining interest from exploration companies as well as the low global oil prices, Lithuania has decided to abandon its efforts in exploring the country’s shale gas reserves. The Lithuanian government, however, remains optimistic about the development of conventional resources.
The Minister of Energy, Rokas Masiulis, along with the Minister of Environment, Kestutis Treciokas, have agreed that announcing another shale licencing round, given the current market conditions – especially in the light of low oil and gas prices – cannot be justified.
“This is not the right time to invite tenders,” Mr Masiulis said. “A tense geopolitical situation, along with adjustments to business budgets caused by low oil prices in the global markets, have caused many companies to lower their spending when it comes to unconventional oil and gas exploration. Some projects have been postponed indefinitely,” he said.
“We had originally planned to launch another round of shale licencing within the next two to three months. The decision to abandon the project, however, will be taken by the government and not just by myself. If companies do not express any interest in the tender, then it makes no sense to go through with it,” he added.
Mr Masiulis said that the situation might change once crude oil prices pick up again. The government in Vilnus is particularly optimistic in the development of the Silute-Taurage deposits, abandoned last year by Chevron.
U.S. giant Chevron won a tender for exploration in Silute-Taurage in the west of the country in 2012 but pulled out of shale gas extraction in Lithuania in September last year before the final agreement was reached. At the time, Lithuanian parliament adopted proposals for 40 per cent taxation of shale gas production and announced a tightening of environmental regulations.
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