San Leon Energy, an oil and gas exploration company with operations in Europe and North Africa has announced that it has begun the drilling of the first well in the Polish Karpaty region. Meanwhile The Ministry of Environment has denied Silurian Ltd an extension on their two concessions.
The drilling of the San Leon Kety well in the Karpaty mountains which commenced on 26th September is scheduled to be completed by the mid-October. The flow tests are planned for the end of the next month. The exploration work is carried out on both conventional and unconventional gas and oil deposits, including tight gas.
Once the drilling on Kety well is completed, work will commence on the Gieraltowice well in the Bielsko-Biala concession. San Leon is the operator as well as the major shareholder on the above concessions – holding sixty per cent share, with the remaining forty per cent held by the Polish state-owned firm PGNiG.
The news about San Leon’s new well comes at the heels of the announcement that The Ministry of Environment has decided not to extended two concessions belonging to Silurian Ltd., which is owned by Petrolinvest. The company was not able to document the sources of financing of the project.
The company had licenses for the exploration of oil and natural gas in the “Makow Mazowiecki” in Mazovia and the “Chodel” in the Lublin region.
The U.S. Energy Information Administration (EIA) estimated that Poland could have the biggest shale deposits in Europe (5 trillion cubic metres), but more recent estimates by Poland’s State Geological Institute have been lower, at 345.7 billion cubic metres.
Despite the promising estimates, it seems that the interest of foreign oil and gas companies in Poland has waned in recent months with many of the major players deciding to abandon shale exploration in the country. In the recent months only Polish companies – PGNiG and PKN Orlen – were truly active in searching for shale gas. The loss of interest in Polish shale was often explained by the difficult geology and disappointing production results. Having said that, the number of wells drilled in Poland – although more than anywhere else in Europe – is still too small to fully assess the shale opportunity in the country.
Meanwhile, Poland’s minister of the environment Maciej Grabowski has revealed that test extractions of shale gas are in the pipeline over the coming months.
“We have information that some investors aim to carry out the tests this year,” Grabowski said.
“We know that shale gas is there, but the most important question is whether the mining technology and the associated costs justify the exploitation of wells on an industrial level,” he concluded.
“It will be the first such undertaking in Poland,” he added.
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