January 23, 2012 / 4:15 PM / 7 years ago

Poland's Lotos to look for shale gas in Lithuania

* Polish Lotos plans to drill for shale gas in Lithuania

* Govt estimates shale gas reserves at 120 billion cubic metres

VILNIUS, Jan 23 (Reuters) - Polish oil company Lotos said on Monday it will start drilling for shale gas in neighbouring Lithuania, and plans to take part in a tender to obtain new licenses later this year.

“We decided to start with the first drilling for shale gas or shale oil, let’s see what is underground,” Pawel Olechnowicz, the president and chief executive of Lotos, told reporters.

“We will make the first tests this year,” he added, declining to specify the timing.

Lotos CEO also said the company obtained approval to drill new wells for conventional oil in Lithuania, speaking after meeting with the Prime Minister Andrius Kubilius.

The Polish government holds a 53 percent stake in Lotos, which controls the biggest Lithuanian oil company Lotos Geonafta, and has 50 percent at another oil company, Minijos Nafta.

“Minijos Nafta will be the first company in Lithuania to explore the shale in Lithuania. We have been working on this for two years already,” Thomas Haselton, the CEO of Minijos Nafta, told Reuters in an email.

“Our specific exploration plans with regard to shale this year are to frac one of our existing wells within the shale zones, probably in the spring, and to drill a new well specifically for shale hydrocarbons in the summer or fall of this year,” he added.

A separate license to explore shale for hydrocarbons is not required in Lithuania, the government officials said, but there could be environmental requirements to be met.

“It is too early to say whether Lithuania will produce and oil or gas from shale, but there is a reasonable chance that hydrocarbons could be produced from shale in the southwestern part of Lithuania,” Haselton said.

Lithuania’s State Geological Service plans to call a tender in spring to issue new licenses to explore for hydrocarbons, including shale gas, at two new fields close at the border with Poland and with Russia’s enclave of Kaliningrad.

The fields cover about 2,000 square km, while already issued licenses cover a territory of about 6,300 square km.

“We are also prepared if there is going to be issued an new run for new concession here in Lithuania... Lotos Geonafta is going to be a partner of that,” Olechnowicz told reporters.

Preliminary estimates show there may be up to 120 billion cubic metres of shale gas reserves in Lithuania, government document has showed.

Neighbouring Poland has issued more than 100 shale gas exploration permits to companies including global majors Chevron and Exxon Mobil, after a U.S. study said Poland could have 5.3 trillion cubic metres of recoverable shale gas, the biggest in Europe. (Reporting by Nerijus Adomaitis, editing by William Hardy)

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