Minijos Nafta, the largest oil extraction company in the Baltic states, has launched exploration of Lithuania's Curonian Lagoon to determine the oil potential of the region.
The project, expected to cost some 8 million litas (2.32 million euros), will cover a 110-square-meter territory that includes 50 square meters of the Curonian Lagoon, an inlet of water near the Curonian Spit, a strip of land on the Baltic Sea divided between Lithuania and Russia's Kaliningrad region.
Exploration is being carried out with the help of U.S. and Russian experts and company officials said they expected processing data to take roughly six months.
According to Lithuania's State Geology Service, a total 193,000 tons of oil were extracted in western Lithuania in the first half of 2002, a 20 percent increase year on year.
Minijos Nafta produced 125,000 tons, up by 41 percent. In 2001, Minijos Nafta earned an audited profit of 88.4 million litas.
Minijos Nafta, which currently produces around 70 percent of Lithuania's total oil output, operates 15 wells in four Lithuanian oil fields.
Odin Energy and two smaller Danish companies hold 50 percent in the firm while Geonafta, a local oil extracting company, holds the other half.
Environmental activists, already fighting a campaign against Russia's LUKoil to drill for oil in the Baltic Sea for fear that a spill could damage the nearby Curonian Spit, have also rallied against Minijos Nafta's plans.
"Our campaign against LUKoil got support from UNESCO, which sent a letter to Kaliningrad officials saying the Curonian Spit is a special environmental zone under UNESCO protection," said Linas Vainius, deputy chairman of the Lithuanian Green movement. "We are concerned with Minijos Nafta's work because the Curonian Spit and the Curonian Lagoon are very sensitive places from an environmental point of view."
Minijos Nafta officials say they do not plan to build a platform in the Curonian Lagoon should they find oil and said curved wells would be constructed and oil extracted in a safe way.
"Our company is strong on the land and even if we find oil in the lagoon, we would think about how to extract it on land avoiding contact with the lagoon's water," said Thomas Haselton, Minijos Nafta director general.
He also expressed concern about LUKoil's plans to extract oil in the Baltic Sea, pointing out that the Russian company has no experience of works in the open sea.