Chevron Enters Lithuania to Flex Muscles for Shale Gas Operations

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Researched by Industrial Info Resources (Sugar Land, Texas)--Major U.S. oil company Chevron Corporation (NYSE:CVX) (San Ramon, California) entered the Lithuanian market to expand its shale gas business in Europe. The second-largest U.S. oil company said that it acquired a 50% stake in Lithuanian oil and exploration company LL Investicijos.

LL Investicijos is a Polish-Lithuanian company with an exploration license in Rietavas, in western Lithuania. Chevron already has picked up licenses to explore shale gas basins in Poland, Romania, Bulgaria and Ukraine. "Chevron can confirm that we have acquired an interest in LL Investicijos and that in the coming months, this company will commence exploration activities in Lithuania on behalf of its owners," Chevron said in a statement.

Lithuanian Prime Minister Andrius Kubilius said that he welcomed the Chevron investment, calling it "a significant event" because Lithuania had substantial shale gas reserves to tap, in a press conference in capital city of Vilnius, Agence France Presse reported.

"I want to emphasize that on the theoretical calculations, in Lithuania there could potentially be around 480 billion cubic meters of shale gas," he said in a press conference. "Lithuania consumes around 3.5 billion cubic meters of gas annually. The calculations are very simple: if we can extract 120 billion cubic meters of gas, and annual consumption is 3 billion cubic meters, over 40 years Lithuania will be able to supply its own gas requirements."

Lithuania is currently wholly dependent on Russia to supply its natural gas and import 100% of its gas from Russia's gas giant OAO Gazprom (Moscow, Russia). The U.S. Geological Survey estimates recoverable reserves of shale gas in Lithuania at 120 billion cubic meters.

Last September, the European Union opened an investigation into whether Gazprom blocks fair competition in the natural gas markets of Central and Eastern Europe. For additional information, see September 6, 2012, article - European Commission Probes Russian Gas Giant Gazprom.

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