Poland in 'shale law shake-up'

Fading light: in Polish shale sector

Poland is set to overhaul its investment regime for shale gas exploration following high-profile exits that have undermined confidence in the country’s nascent sector, according to a report.

Draft legislation is currently in the works to make it easier for companies to explore and extract unconventional gas, Poland's Environment Minister Marcin Korolec told an energy conference on Tuesday.

The new regime would lighten the many bureaucratic obstacles to exploration, including environmental limitations, and create a state operator to take part in energy consortia.

"I expect the shale gas bill to be adopted by the end of June and Parliament should do the same by the end of the year," Korolec was quoted as saying by Reuters.

Analysts have long said Poland needs to adopt laws that will give the stability and predictability foreign investors need as they compete with local state-controlled companies.

While Poland is believed to hold significant shale gas resources, potential investors have become increasingly wary after US giant ExxonMobil and now Canada’s Talisman Energy have decided to pull the plug, with Marathon Oil of the US also heading for the exit after poor drilling results.

The departures have worried Polish officials who see shale gas as a key to reducing dependence on Russian energy supplies.

Deputy Environment Minister Piotr Wozniak said: "Foreign capital is incredibly important for the development of shale gas exploration in Poland, as Polish companies do not have the experience and capital needed.

"It is especially American companies that Poland has to rely on, as they are the most experienced ones," he added, while declining to comment on the decisions by ExxonMobil and Talisman to leave the country.

Initial optimism among investors has been tempered by an unsettled regulatory landscape and a downgrade of estimates for the size of potential reserves.

Poland has issued more than 100 shale gas exploration licences and some 40 test wells are in operation, though none is expected to start producing gas before 2015.

Foreign permit-holders still active in Poland include US giant Chevron and Italy's Eni, as well as smaller players such as UK independent San Leon Energy.

Newsletter signup


Become an Upstream member!

Membership includes a subscription to our weekly newspaper providing in-depth news from the energy industry, plus full-access to this site and its archives. Still not convinced? Try our free trial.

Already a member?