Without the oil agreement, there will be no border agreement

After the visit of the new Lithuanian Minister of Foreign Affairs Gabrielius Landsbergis, Latvian officials say that "Latvia and Lithuania are good neighbors and allies". However, even for good neighbors, their own interests are paramount, and that is why the land border between the two countries exists, but the sea border does not. Latvia does not want to lose its oil and will continue discussing it when Lithuanian Prime Minister Ingrida Šimonytė pays her first visit to Latvia.
16.02.2021. Imants Vīksne

The imaginary sea boundary line is marked on the map and is also attached to the document “Agreement between the Republic of Latvia and the Republic of Lithuania on the delimitation of the territorial sea, exclusive economic zone and continental shelf in the Baltic Sea”.

The agreement was signed by both parties on July 9, 1999, in Palanga, but it has not entered into force. The Lithuanian Seimas has ratified the agreement, while the Latvian Saeima has not. The Latvian side has no objections to the imaginary line on the map. The line is straight and symmetrical. The sea is divided fairly, but the problem lies deeper in depths of the sea. Actually, under the sea. Article 4 of the Agreement reflects this problem: "Where mineral deposits located on the sea-bed or in the subsoil extend on both sides of the boundary of the territorial sea and continental shelf, and where those mineral deposits can be wholly or in part exploited from the territorial sea or continental shelf of the other Party, the Parties shall, at the request of either of them and prior to such exploitation, enter into negotiations and make an agreement on the conditions for the exploitation of these deposits."

Two straws in a cocktail glass

For the maritime border agreement to be ratified, an economic cooperation agreement must first be reached. Respectively, it is necessary to agree not only how many square meters of the sea each country deserves, but also how many barrels of oil. Latvia's oil fields are concentrated in the southwestern part of the Latvian continental shelf. The potential oil resources in our part of the sea are estimated at 40-60 million cubic meters. That is what had been reported in the “The Maritime Spatial Plan for Internal Waters, Territorial Waters and Exclusive Economic Zone of the Republic of Latvia (MSP 2030)” and approved by the Government. However, deposits also continue in Lithuanian waters. In case Lithuanians drill first, Latvian oil will flow to Lithuania. This is a geological peculiarity of oil drilling. Just like two straws set in one cocktail glass. Sip from whichever one you want, the liquid level in the glass will drop. And if the slope is on the Lithuanian side, they will also get more.

History of oil

Latvia has to agree with Lithuania what percentage of the profit each country is entitled to from oil extraction, and the discussion about this has been going on since 1993. It can even be called a conflict because, in one such discussion, Lithuania even recalled its ambassador from Latvia for an indefinite period of time. In addition, fishermen also objected to the borderline on the map, as it could mean the loss of fishing areas for them. In the meantime, the potential Latvian oil driller Amoco left. Other potential drillers were found. However, oil extraction is still not possible without an agreement, and therefore in every meeting of Latvian and Lithuanian politicians, the sea border is mentioned. Even as just a joke. Last weekend too, when a delegation of the new Lithuanian government's Minister of Foreign Affairs Gabrielius Landsbergis arrived in Latvia. They discussed "current issues of bilateral, regional co-operation and international relations" with Latvian colleagues. A press conference was also held.

10 billion at sea

Neatkarīgā's question to the ministers about the oil agreement was not some rehashing of old issues because it turns out, the same morning, diplomats discussed whether the oil is there at all. And, as Minister for Foreign Affairs Edgars Rinkēvičs said, this issue could also be discussed during the visit of Lithuanian Prime Minister Ingrida Šimonytė. His Lithuanian counterpart, Gabrielius Landsbergis, also confirmed that after the Prime Minister's visit, it might become clear whether it was possible to report on any concrete steps related to the maritime border agreement. However, the ministers laughed that Latvia and Lithuania have no intentions of applying for participation in the OPEC oil cartel. (OPEC is a cartel formed by the world's major oil-producing countries that dictates the price of oil products to the world.) However, ministerial modesty when it comes to oil extraction may be out of place. Latvia has oil both on land and at sea. It has been pumped on land for years. In Kurzeme - Gudenieki, by the suiti. Here is the calculation of oil stocks in the state publication Latvijas Vēstnesis in 2003: "It is estimated that 63 million barrels of oil are forecast on land, which is about 1.57 billion US dollars or one billion lats if oil costs 25 dollars per barrel." In Gudenieki, oil has been pumped for many years. How much is pumped is not known to the public, but the companies are selling about million euros a year. Today, even in bad times, oil costs around 40 dollars. There are about 375 million barrels of oil in the sea. So it's worth 10 billion. But there may be more of it.

Currently, there is a great friendship between Latvia and Lithuania, at least in words. Therefore, there is a possibility that the economic cooperation agreement, or the oil agreement, without which Latvia refuses to ratify the agreement on the sea border, will break from the deadlock.


Be the first to read interesting news from Latvia and the world by joining our Telegram and Signal channels.