Lithuania set to agree Chevron deal "this year" says minister

By bne IntelliNews July 11, 2013

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Lithuanian Minister of Energy Jaroslav Neverovich said on July 10 that he has no doubt that the contract granting US energy major Chevron the right to start prospecting for shale gas will be signed this year.

Lithuanian oil and gas exploration company LL Investicijos - in which Chevron owns a major stake - is waiting to begin exploratory drilling in the district of Silute. The US company was the only bidder in a tender for the licence last year, which the previous government put up for grabs as part of its urgent efforts to break the country's dependence on Russian gas.

However, on coming to power in December, Prime Minister Algirdas Butkevicius has followed a more "pragmatic" relationship with Moscow and a slower strategy of developing Lithuania's energy security. Although the unbundling of national gas utility Lietuvos dujos has been pushed through, the project to build a new nuclear power plant - Lithuania is also heavily dependent on Russian electricity - has fallen by the wayside.

Meanwhile, the deal with Chevron has been in limbo since February. Echoing opposition to the controversial fracking technique used to extract shale gas seen across Europe, some small protests were apparently enough to persuade the environment ministry to put the licence on the back burner.

The PM has spent the months since promising imminent, fast-tracked action. "We'll sign the agreement after parliament adopts [new environmental legislation], which in the best case could be three weeks after Easter," Butkevicius told reporters in March. "Hopefully in early May we can start getting ready for actual exploration." Butkevicius promised in April that an agreement with Chevron would be signed "soon".

It's all gone quiet since however, and both the EU and Lithuanian President Dalia Grybauskaite have pushed the government to accelerate its efforts at diversifying energy sources. In particular, Grybauskaite picked out the delay in giving Chevron the green light.

"While we bicker indecisively drafting a national energy strategy, our seventh, decisions are being made for us" by outside people and events, she told parliament in June. "It's time to get to work."

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