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The company plans to invest 17.7 million litas ($4.42 million) in the oil sector in 2001, 2 million litas more than originally specified in the purchase agreement..
Geonafta decided to invest 12.7 million litas in oil production annually and 5 million litas in the exploration of oil fields, said company spokesman Ricardas Jarmalavicius.
"Experts believe that there about 19 million tons of crude oil in the ground in Lithuania whereas there are between 30 million and 60 million tons off the coast in the Baltic Sea," he told The Baltic Times.
The additional exploration money will target offshore deposits and the company is compiling a database of all research done in this area in the past. Geonafta hopes to extract 89,000 tons of oil in 2001, 33 percent more than last year.
Jarmalavicius said that the additional investment funds would be put toward offshore exploration in the Baltic Sea. The only obstacle Geonafta faces at present is a lack of clear legislation regarding offshore drilling, but Jarmalavicius said that the Parliament would shortly pass a law clarifying this issue.
Jurgis Vilemas, an expert with the Lithuanian Energy Institute in Kaunas said that Latvia and Russia's Kaliningrad region have succeeded in doing more preliminary research on offshore deposits than Lithuania and that the additional funds are a welcome development. He said that while the oil sector in Lithuania provides people with jobs and the government with tax income, it is quite insignificant as far as meeting the country's energy needs.
Naftos Gavyba, an international consortium, acquired 81 percent of shares in Geonafta in 2000. Naftos Gavyba was formed by the Polish oil production and energy companies Petrobaltic and Energopol Trade, the Swiss finance and consulting firm Arada, the Lithuanian brokerage firm Vivum, and the West Lithuanian Industry and Finance Corporation. The consortium pledged to invest 56 million litas in the next five years.
Geonafta was originally founded in 1964 as a state enterprise to exploit oil deposits along the Baltic coast and has wells in the Plunge, Kretinga, Nausodis and Girkalis regions. Since its inception the company has carried out more than 20,000 kilometers of seismic profiles, built 400 wells in Lithuania and extracted 5.5 million cubic meters of crude oil.
Geonafta is 96th on the Verslo Zinios list of Lithuania's 300 largest companies. Geonafta has 55 percent stakes in two smaller companies, Minijos Nafta and Genciu Nafta. Together, the Geonafta group will produce a projected 500,000 tons of crude oil in 2001. The group exports more than 90 percent of the oil it produces to Poland where it is refined and processed. "We have had some discussions with Mazekiu Nafta but right now it is simply more profitable for us to export the oil," said Jarmalavicius.