Latvia and Lithuania sign treaty demarcating Baltic Sea border

Jul 17, 1999 02:00 AM

Lithuania and Latvia may be able to begin exploration of potentially lucrative offshore oil and gas deposits now a bilateral treaty demarcating the sea border between the two Baltic states is in place.
However, the deal, which has yet to be ratified by the parliament of either country, does not state exactly how subsurface resources are to be shared.
Riga and Vilnius have been negotiating the treaty for about five years, a process that was complicated by the fact that the offshore fields are believed to contain perhaps 50 million metric tons of oil. (This amount would easily serve to meet domestic demand in both small states for years. The two countries currently depend on Russia for their oil and gas.)
The area was surveyed several years ago by Amoco of the United States. The Latvian government in 1996 granted Amoco a license for development of the offshore zone, and Amoco agreed to proceed through a 50-50 venture with Sweden's OPAB, a subsidiary of Svenska Petroleum.
However, Amoco backed out of the deal after its decision to merge with British Petroleum. OPAB reportedly still holds its part of the license.
Lithuanian officials have complained that Latvia left them out of this project.

Source: NewsBase
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