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Poland’s Shale Dreams Fade As Investors Complain Of Red Tape

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Agnieszka Barteczko, Reuters

Hopes that Poland could lead a U.S.-style shale gas boom in Europe are fading fast as energy companies say red tape is delaying commercial output and Warsaw’s draft proposals to cut bureaucracy do not go nearly far enough. Executives say firms may quit unless gas flows soon

 

The firms say there is plenty of gas but its exploitation is frustrated by difficult geology and onerous, unclear regulation.

Prospects darkened this year after Marathon Oil and Talisman Energy followed Exxon Mobil in pulling out of Poland, which was once seen as Europe’s best shale prospect with substantial reserves and a friendly government.

These companies may not be the last, unless one or more of the 46 exploration wells drilled so far starts producing commercial-scale quantities of gas.

The government, hoping shale gas will deliver Poland from reliance on energy imports from Russia, is proposing new legislation to ease conditions for investors.

“If the law is adopted in its current shape, plus two or three more unsuccessful wells, and other investors will leave,” said an official with a foreign firm prospecting for shale gas, expressing views echoed by several other executives.

“The situation is very bad, everyone is discouraged,” said a second company official, who also asked not to be identified.

Global players remaining in Poland’s shale sector include Chevron, ConocoPhillips and Eni.

Under pressure to retain investors, the deputy environment minister and chief geologist, Piotr Wozniak, has drafted proposals for new rules that are awaiting cabinet approval.

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