Total calls it quits on Polish shale gas

Flag of Poland
Source: DollarPhotoClub

French oil giant Total decided to pull out of shale gas exploration in Poland. Total’s exploration licence on the plays in the South-East of Poland expired on 31 March and the company did not request a renewal – said Poland’s ministry spokesman Pawel Mikusek.

This was Total’s only licence in Poland. By pulling out of Poland, Total joins Italy’s ENI, as well as ExxonMobil, Marathon Oil, and Talisman Energy, which have also abandoned shale exploration in Poland. Chevron is the only large company that is still hunting for gas in Poland.

Although Total has not given a reason for today’s decision, other companies leaving Poland quoted difficult geology and unclear legal situations as reasons for their departures. To stem the exodus of oil companies, Polish government – on 11 March 2014 – adopted a draft Bill to amend the Geological and Mining Law and a draft Bill on Special Hydrocarbon Tax to both regulate and facilitate activity in the shale gas industry. The Bills will be forwarded to the parliament shortly.

In their recent report, the US Energy Information Administration (EIA) lowered its estimates for Poland’s shale gas reserves from 187 trillion cf in 2011 to 148 trillion cf. Despite this, Poland is still widely regarded to be one of the countries with the most substantial reserves of shale gas in EU.

Poland’s government is eager to push on with shale gas exploration to offset the country’s high dependence on Russian gas. The government’s support for shale gas is unequivocal. Poland is to invest 12.5 billion euros ($A18.47 billion) in the sector by 2020 and hopes to produce unconventional gas on a commercial scale in 2014.

Total said it would consider future shale opportunities in the country.

“Poland remains a promising country for shale gas, but the exploration process is in its infancy and the industry needs more data and time to understand the geology of Polish sedimentary basins,” a Total spokesman said.

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