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Poland’s Shale Gas Dreams Withering on the Vine

It wasn’t long ago that people were predicting Poland would be one of the next big boom sites for shale. The country seemingly had a lot of it, and gas companies were tripping over themselves to be first movers in the new market. But complex geology and bureaucratic red tape are leaching that dream of its promise, and it’s looking less and less likely that the country will be able to replicate America’s shale revolution.

Three firms—Marathon, Talisman, and Exxon Mobil—have already abandoned their projects in the country. While Poland caved to pressure from drilling companies last month by eliminating a rule that required extra permitting for wells drilled deeper than 1,000 meters, Chevron is now agitating for further regulatory reform, with the implied threat that it, too, could jump ship. The FT reports:

The oil and gas groups are unhappy about the creation of a state operator, which has to be involved in all projects. But the main tension now seems to be that, as the geology has proved more frustrating than expected and exploration wells have disappointed, the exploration companies have sought more leeway on the length of exploration licences and work schedules.

The resource itself is also tempering expectations: the Energy Information Administration’s latest global survey of shale gas revised Poland’s technically recoverable reserves downward by more than 26 percent. More worrying: none of the country’s 46 exploratory wells are yet producing commercial quantities of shale gas.

Poland still has sizable reserves, and if it can iron out its permitting process, it still has an upside. But the euphoria of the initial discovery of its reserves has faded to a more cynical realization that shale might not be enough to wean it from the onerous contracts it has with Russia’s Gazprom. As one anonymous employee for a foreign drilling firm put it, “the situation is very bad, everyone is discouraged.”

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  • K Bledowski

    Clearly shale gas is but one of the many energy sources. It’s surely disappointing that a lot of effort and money expended so far have so little to show for it. But prospecting for resources has always been a hit-and-miss blend of science and luck. The game is not up yet.

  • Pete

    Too bad. The Poles deserve a break.

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