Chevron moves closer to Romania shale gas exploration

U.S. energy major Chevron is moving towards exploration for shale gas in eastern Romania but still needs at least two more permits before it can start drilling, the environment ministry said on Thursday.

Local authorities in Vaslui county, where Chevron has a 1.6 million acre concession, have granted the company planning permits for three shale gas exploration wells.

"This document does not confer the right to carry out works," the environment ministry said in a statement to Reuters.

"We are talking about exploration, not exploitation, and we are in the first phase of assessing an environment permit", for one of the three wells, the ministry said.

The U.S. Energy Information Administration (EIA) estimates that Romania and neighboring Bulgaria and Hungary could have 538 billion cubic meters of shale gas between them, slightly more than Europe's annual consumption and enough to cover Romania's for almost 40 years.

Anti-shale gas activists protested last year in Romania, however, asking the government to annul Chevron's exploration rights on environmental concerns and keep a moratorium on exploration enforced by the ruling leftist government.

But after a clear victory in a December election, Prime Minister Victor Ponta has indicated Romania will allow companies to at least look for shale gas.

Chevron will also need permission for construction before it can start exploration work, according to the text of a law cited by the ministry.

Hydraulic fracturing or fracking to extract shale gas involves injecting water and chemicals at high pressure into underground rock formations. Experts say that if it is done according to best practice it is environmentally safe, but the technology still evokes much public concern.

Ponta has softened his views on shale gas exploration since the December election, in which his alliance won a two-thirds majority in parliament.

"Exploration yes. After confirming gas exists or does not exists in approximately five years, we will make a final decision," Romanian news website HotNews quoted him as saying last month.

(Editing by Sam Cage and Jane Baird)