Chevron (NYSE: CVX) has bought a 50 percent stake in LL Investicijos, a privately-held Lithuanian oil and gas exploration concern. The purchase is a clear sign Chevron is eyeing European shale prospects.
Lithuania currently relies entirely on Russia for supplies of natural gas, but the country is actively trying to develop indigenous resources.
No details of the deal were announced, but it is expected that Chevron will increase its share in the near future. Chevron’s European efforts are being led by Derek Magess, director general of the company’s onshore European operations.
The company expects to discover substantial quantities of recoverable shale gas in a belt that runs across Europe from the Mediterranean to the Baltic nations. Chevron has already bought around 4 million acres in Poland and Romania, is working on a production-sharing contract with Ukraine, and is urging Bulgaria to lift its moratorium on shale gas exploration, the New York Times reports.
So far, Chevron has just bored two wells in its Poland holdings, though it hopes to begin another well shortly. It may also reopen an older Poland well for further exploration.
Several European nations still impose a ban on fracking over contamination concerns, something that is likely to give pause to American oil companies operating overseas.
Chevron, for example, has already met with resistance in Poland, but a possible counter-argument that may hold compelling power is the prospect of several European nations gaining independence from Russia’s oil monopoly, Gazprom (MCX: GAZP).