The Latvian government announced last week that it will invite tenders next April for long-awaited offshore oil exploration licenses.

The Latvian government announced last week that it will invite tenders next April for long-awaited offshore oil exploration licenses on a 2,675-square-kilometer tract of its Baltic Sea waters. The tract will be divided into seven parcels and lies well north of the proposed Latvia-Lithuania sea border, a point of disagreement between the two countries that has scared off oil companies in the past. Industry estimates have put the possible volume of Latvia's offshore reserves, though not commercially proven, at 250 million barrels. But a senior government geologist cautioned that previous estimates are inaccurate, saying that only drilling will establish the real quantity. Meanwhile oil exploration further to the south is being delayed by Latvia's failure to ratify a new sea border treaty with Lithuania. The oil tender process is being publicized at a major oil industry conference in London between Nov. 28 and Nov. 30. The government made the announcement now to meet with Latvian law, which requires that notice be given to the public and environmental groups. Offshore drilling in Latvia, to the west and south of Liepaja, broke off with the collapse of the Soviet Union. The drilling results, and the results of geological tests suggest there are "prospects," according to Maris Seglins, deputy director of Latvia's State Geological Survey, who added that there is still much uncertainty. The Cabinet of Ministers has established guidelines for the creation of a national oil company from which the state would get a share of offshore production. Oil drilling to the south has been held up by delays in the Latvian Parliament over ratification of a sea border treaty with Lithuania. Latvian MPs, fearing Latvia may be sidelined by Lithuania's more advanced oil industry, have expressed concern that Latvia should receive a share of revenue generated by extraction of oil from possible reserves straddling the border. But the dispute led BP Amoco, which along with Swedish OPAB received an exploration license in the mid 1990s on a parcel abutting the proposed border, to abandon oil exploration plans there. Latvian fishing groups have been lobbying Parliament, saying the proposed border gives Lithuania territory which was Latvia's prior to the Soviet era. They have threatened to blockade ports if Latvia ratifies the treaty. While the treaty has been approved by Latvia's foreign affairs committee, opposition to ratification has come from MPs in Latvia's Way party, which is central to the governing coalition, says Guntars Krasts, head of the foreign affairs committee and an MP from the For Fatherland and Freedom Party. Once the two countries join the European Union, fishing boats from other EU countries will be able to operate freely in the territory anyway, he says. In comments to the press, Lithuania's new Prime Minister Rolandas Paksas has expressed frustration at the hold-ups.