Chevron Lithuania Shale-Gas Deal Delayed to May for Law Changes

Lithuania will wait to sign a shale-gas exploration agreement with Chevron Corp. until Parliament amends laws to strengthen environmental regulations, Prime Minister Algirdas Butkevicius said.

“We’ll sign the agreement after Parliament adopts the legislation, which in the best case could be three weeks after Easter,” Butkevicius told reporters today in Vilnius, the capital. “Hopefully in early May we can start getting ready for actual exploration.”

Chevron, a U.S. energy company, last year bought half of the Lithuanian oil and gas recovery company LL Investicijos and in January submitted the only bid in a tender for shale-gas exploration rights in the Baltic nation. Two parliamentary committees this week urged the government to ban exploration until laws regulating such activity are strengthened.

Butkevicius said he subsequently agreed with lawmakers that the government will rush to prepare draft legislation and parliament will give the matter fast-track treatment.

The main change would be a new requirement for an environmental impact study of exploration, separate from the study required for potential later production of any shale gas that is found.

“The delay will let political passions subside and will give us more time to assuage concerns” of residents of the areas where exploration is planned, he said. “In any case, we have to find out what resources lay beneath our land.”

The prime minister said shale gas should get a chapter of its own in a national energy strategy that the government is preparing, since it may help reduce dependence on imports of natural gas from Russia.

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