New shale gas exploration in Lithuania

  • 2014-04-02
  • From wire report

VILNIUS - A new tender for shale gas exploration and production in the Silute-Taurage field, Western Lithuania, may be issued in May or June, the Environment Minister has said, adding that some of the required legislative acts have already been drafted and others are being worked on.
“Issues related with taxes on oil and shale resources, if approved by the government, will also need the approval of the Seimas. However, we have actually prepared all other legislative acts, the terms and conditions of the tender. Hence we think it might be possible to issue the tender in late May, in June, and we have to move towards that,” Valentinas Mazuronis told BNS.

He emphasized the need to approve the rates of taxes that would be levied on oil and shale resources so that potential bidders would be aware of the tax environment they might expect.
“There are several options. Under one of the options we leave the taxation of traditional oil unchanged and keep the current 10 percent average, or raise it slightly, …, to the average of 12-13%… The average taxation of shale resources, as proposed, would be 15 percent,” the minister said.

US energy giant Chevron, the sole bidder in the previous shale gas tender, pulled out last October citing unfavourable tax and legal environment in Lithuania as the reason.
Lithuania’s policymakers last year mulled a proposal to slap a 40% basic tax on shale gas, which would have been the biggest rate in the world.