Latvia's Ministry of the Economy has announced that the Latvian offshore territory in the Baltic Sea is now open for the licensing of pre-investigation. For this licensing round, the region on offer covers nearly all of Latvia's offshore territory in the Baltic Sea. The licensing round has been officially set for May 2002.
In 2Q 2001 Latvia launched its first licensing round in London. The area up for bid at that time included seven offshore blocks on the Baltic Sea shelf. An additional 66 blocks were put up for reconnaissance licenses. Total acreage covered 2,675 sq km. Unfortunately, the region drew little international interest.
New legislation might well change the level of interest. Latvia's legislation regarding offshore hydrocarbon exploration and production offers a royalty of 2%-12% and corporate tax of 22%, which constitutes favorable terms for investors. The industry is being granted the right to review terms in the future.
In late February 2002, Latvia awarded TGS-Nopec an exploration license to a 70,850-sq-km block in the Baltic Sea. The tract being awarded was selected outside the region for which Latvia is disputing ownership with Lithuania. The license covers a two-year period with an optional three additional years. Royalties on any oil produced are to be 2-12%, depending on the rate of extraction.
A regional seismic data package including 1,145 km of seismic selected from 11 surveys, acquired between 1976 and 1989 is already available. Archive stacks from different surveys were reprocessed using ProMax software and are now presented as composite regional lines showing main structural elements in the Latvian part of the Baltic basin and tying the offshore wells to a number of undrilled prospects.
The Latvian shelf is said to hold up to 372 MMbbl of oil.
