imageVILNIUS: Polish energy company Lotos said it might be willing to explore for shale gas in Lithuania, provided the conditions on offer are improved, after Chevron pulled out as the sole bidder in a tender for a license.

The Baltic Basin, which extends from northern Poland to southwestern Lithuania through Russia's Kaliningrad exclave is seen as one of the most promising regions for shale gas exploration in Europe.

“Yes, if conditions are acceptable," Lotos Chief Executive Pawel Olechnowicz told Reuters, when asked whether Lotos would be interested in taking part in a new tender.

Lotos controls most of Lithuania's oil production through full ownership of two small oil companies and a 50 percent stake in a third, all of which hold conventional oil licenses. Chevron said when it withdrew that changes to law had made the license less attractive.

Lithuania's environment ministry formally cancelled the shale gas exploration tender last week but said another one could be called after revising the legal framework.

Lithuania media speculated that one reason Chevron withdrew could have been proposals in parliament to double a tax on shale gas production to 40 percent.

“I have no problem with taxation at 40 percent," Olechnowicz said on the sidelines of an energy conference.

For Lotos, the issue is the terms for the early stages of the license before oil is produced, he said. “We don't want to be obliged to pay much money before production starts.

That was the reason why we didn't put application (last time in Lithuania)," Olechnowicz said. According to the rules of the last tender, participants bid for a licence by committing to make upfront payments.

Chevron was reported to have bid 150 million litas ($58.7 million).

Lithuania's environment minister, Valentinas Mazuronis, said the aim of revising the legislation was to attract more bidders.

“We don't have timetable for the next tender. We don't have a goal to rush headlong towards it," he told Reuters.

The US Energy Information Administration (EIA) estimated in a report this year that Lithuania holds around 11.3 billion cubic metres of technically recoverable shale gas, a tenth of its previous estimate.