Chevron announced that it had acquired a 50% stake in privately held LL Investicijos, a Lithuanian oil and gas exploration company. The company released a statement saying that the acquisition fits in with Chevron’s regional strategy and that it was attracted to the exploration acreage controlled by Investicijos. Derek Magness, director general of Chevron’s onshore European operations, said in an interview, “We believe Lithuania is going to be a good host government.” The terms of the deal were not disclosed.
The Lithuanian Prime Minister, Andrius Kubilius, welcomed the Chevron investment, calling it “a significant event.” Lithuania is currently dependent on Russia to supply its natural gas and needs to develop its hydrocarbon resources for energy security. Lithuania has substantial shale gas reserves to tap. Mr. Magness said Chevron would consider increasing its stake in the future.
Shale gas has transformed the U.S. natural gas market. The gas is extracted through the controversial method of hydraulic fracturing, also known as fracking. Chevron is among the most active of the major companies pursuing shale gas in Europe. Chevron is the second largest U.S. oil company, after Exxon Mobil.
The company has predicted that a belt it has identified across Europe, stretching from the Baltic countries to the Mediterranean, may hold extractable shale gas in large accumulations. In most eastern European countries, so few wells have been drilled that it is nearly impossible to appraise the size of the potential resources or whether they are commercially exploitable.
Chevron has already acquired nearly four million acres of exploration acreage in Romania and Poland. Chevron is also trying to coax Bulgaria into lifting its moratorium on shale gas drilling and is negotiating a production-sharing contract in Ukraine. Mr. Magness is leading Chevron’s shale gas exploration efforts in Europe.
On its Poland concessions, Chevron has already drilled two wells and is planning to begin another soon. The company is also planning to reopen one of the earlier wells, in southeast Poland, to perform further tests. Exxon Mobil stopped drilling in Poland earlier this year after just two wells.