U.S. energy major Chevron has pulled out after winning a tender to explore for shale gas in Lithuania, blaming changes to laws which have made it less attractive. Lithuania called the shale gas exploration tender hoping to become less reliant on gas from its former Soviet master, Russia. Chevron was the only bidder to explore for unconventional hydrocarbons in the 1,800 square km Silute-Taurage prospect. The government picked it as a winner a month ago.
The U.S. company said in a statement it blamed regulatory and legislative changes that came in after it placed the bid for exploration rights. « Significant changes to the fiscal, legislative and regulatory climate in Lithuania have substantially impacted the operational and commercial basis of the investment decision since the company submitted its bid in January 2013, » it said.
Lithuania’s Prime Minister Algirdas Butkevicius said in a statement he regretted Chevron’s decision, but admitted there was a lack of regulatory clarity. « The parliament still debates various amendments, which could affect the use of hydrocarbons in our country. That means, that first of all we need to have a legal framework in place, » he said in a statement.
The proposals debated by the parliament include taxing exploration of shale gas and shale oil at 40 percent, up from the current 16 percent on conventional hydrocarbons. « The government will discuss whether to call a new tender for exploration of shale gas and oil, » a government spokeswoman said.
Chevron said it will stay in Lithuania, focusing on exploration of conventional hydrocarbons at its existing Rietavas block. The company also said it remained « committed to exploring and evaluating investment opportunities in Central and Eastern Europe. » Chevron, which has four concessions for shale gas exploration in neighboring Poland, said earlier it wanted more consultation with the Polish government on proposed draft amendments before they are adopted. Exxon Mobil, Talisman and Marathon have pulled out of Polish shale gas, citing difficult geology and short-comings in the regulatory environment.