On Friday, the U.S. major Chevron announced that it is abandoning it’s efforts at shale gas exploration in Poland.
The company announced in a statement that it had decided to “discontinue shale gas operations in Poland”, attributing the decision to the fact that projects “no longer compete favourably with other opportunities in Chevron’s global portfolio”. In departing from Poland, Chevron joins a number of other companies including 3legs Resources, Eni, Total, Marathon Oil, Talisman Energy and Exxon Mobil who have given up on Polish shale over the last two years.
Despite this setback, Polish Prime Minister Ewa Kopacz said on Tuesday that Poland will continue its search for shale gas. “Shale gas and energy security will still be our priority,” Kopacz told a news conference.
Chevron, which has reported that its earnings for the fourth quarter of 2014 fell nearly 30 per cent compared with a year earlier, to $3.5 billion, has already pulled out of Lithuania and is currently assessing the results of its exploration well in Romania. The company continues to maintain an office in Ukraine, but that operation is at an impasse with the government in Kiev.
In November, Poland’s Deputy Environment Minister, Slawomir Brodzinski, said that, despite many foreign investors leaving the country, Poland’s shale exploration is at the most advanced stage of all EU countries, but this only illustrates how slowly shale industry is being adopted in Europe. Only last week, shale in the UK suffered a serious setback when the government was forced to accept a series of environmental measures, sparking fears that the new rules may discourage exploration companies from investing in UK shale.
Speaking to The New York Times, Grzegorz Pienkowski, a director of the Polish Geological Institute in Warsaw, attributed the failure of Polish shale to tricky geology which made exploration difficult and expensive.
He also noted that with only 68 wells drilled, the scale of exploration in Poland is only a tiny fraction of what happened the United States over the last 15 years. He also said that the few drillers remaining in the game now knew how to better target their efforts, giving some hope of future success.
Mr. Pienkowski conceded that at best Poland was likely to have some “isolated” production areas rather than one big continuous shale belt as originally hoped. The industry has learned “a tough lesson that cost a lot of money.”
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