Lithuania and Romania Join Race for Shale Gas

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland) - Lithuania and Romania have opted to back shale gas exploration as both countries struggle to reduce their dependence on Russian gas imports.

The move comes hot on the heels of the Ukraine's decision last month to push ahead with shale gas exploration with Royal Dutch Shell plc (NYSE:RDS.A) (The Hague, Netherlands). The decisions are controversial as European nations differ widely on the use of hydraulic fracturing or 'fracking' to extract the gas.

Romania's decision reverses a nine month ban on exploration in the south east of the country by U.S. oil company Chevron Corporation (NYSE:CVX) (San Ramon, California). The new government has now issued Chevron with the permits it needs to restart exploration in southeast Romania near the town Vama Veche. Chevron has a 1.6 million acre concession with permits for three shale gas exploration wells. However, it is early days for the operation. The company has one of three permits needed to actually start drilling so it will continue with exploration works.

The country's Prime Minister, Victor Ponta, recently told Romanian media: "Exploration, yes. After confirmation of the existence or non-existence of shale gas, which would take around five years, we will take a positive decision that we will exploit shale gas, while respecting all European and world standards for environmental protection".

In recent weeks, Lithuanian President Dalia Grybauskaite granted approval for Chevron to pursue shale gas exploration, despite opposition.

Last October, Industrial Info reported on Chevron entering the potential Lithuanian shale gas market when it took a 50% stake in Lithuanian oil and exploration company LL Investicijos. The Polish-Lithuanian company has an exploration license in Rietavas, in western Lithuania. Chevron also holds licenses to explore shale gas basins in Poland, Romania, Bulgaria and Ukraine. For additional information, see October 29, 2012, article - Chevron Enters Lithuania to Flex Muscles for Shale Gas Operations.

Last month, Europe witnessed its largest ever shale gas contract between Ukraine and Shell, worth an estimated $10 billion. Ukraine has Europe's third-largest shale gas reserves at 1.2 trillion cubic meters, after France and Norway, and is desperate to reduce its dependence on expensive gas imports from Russia. For additional information, see January 18, 2013, article - Shale Gas Deal with Shell Moves Ukraine Toward Energy Independence.

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