By Marynia Kruk
WARSAW--Companies holding licences in Poland to explore for
natural gas from shale formations are moving ahead with plans
despite Exxon Mobil Corp's (XOM) decision to pull the plug on its
exploration efforts in the central European country, a spokesman
for Poland's shale gas industry group said Tuesday.
Rather than worry about what Exxon is doing, the embryonic
industry's focus is now trained on the Polish government's
still-unpublished proposed law to tax hydrocarbons production and
to create a single regulatory clearinghouse for all oil and gas
exploration and production.
"We don't know of any other companies that are planning to
withdraw from Poland," said Marcin Zieba, the general manager of
the Polish Exploration and Production Industry Organization, known
as OPPPW. "All the other companies are working in accordance with
their plans, testing reserves and looking with optimism to the
outlook of future shale gas production."
Exxon said Monday it will stop exploring for shale gas in Poland
after two early gas wells failed to yield commercial quantities,
raising doubts about Poland's hope to replicate the U.S. shale gas
bonanza and free itself from dependence on Russian gas imports.
Chevron Corp (CVX) said it "remains committed" to its current
exploration program in the country. Its acreage is in southeast
Poland, while Exxon's properties were in the country's center.
"Chevron has drilled two exploratory, vertical wells: one in
Horodysko (G-6), and another one in Andrzejow (F-1)," the company
said in a statement Tuesday. "We have taken the samples of shale
rock and we are evaluating the results."
3Legs Resources PLC (3LEG.LN), considered to be in the Polish
shale gas exploration vanguard, said Tuesday its licenses aren't in
the same two basins as Exxon and are progressing with their
operations on the Baltic coast, in northern Poland.
The company is undertaking further testing of both the Lebien
LE-2H and Warblino LE-1H wells in Poland to gather additional data
on the properties of the target formations and potentially enable
more gas to flow, 3Legs said Tuesday.
Mr. Zieba said the local industry was now eagerly awaiting the
publication of Poland's long-delayed proposed law to tax
hydrocarbons production, which the Environment Ministry said would
also create a single agency to consolidate all regulation of oil
and natural gas in Poland.
"We're waiting for the new hydrocarbons law," Mr. Zieba said. A
person familiar with the matter told Dow Jones Newswires the
Environment Ministry cancelled a news conference earlier in June at
which it planned to explain its hydrocarbons law proposal because
the Treasury Ministry had reservations about it.
Little is known about the new law except that it will direct a
portion of future tax revenues to municipal governments and won't
go into effect immediately, perhaps allowing companies to recoup
early costs. Also, it's unlikely to be as harsh as a recently
imposed tax on now highly profitable copper and silver production,
a decades-old industry dominated by state-controlled miner KGHM
Polska Miedz SA (KGH.WA).
In contrast to copper and silver, commercial production of gas
from shale formations is non-existent in Poland, though another
state-controlled company, PGNiG SA (PGN.WA) is the main producer of
conventional crude oil and natural gas in the country.
PGNiG's taxes on this conventional production are expected to
increase due to the new law, but at least for natural gas, the
company will pass the cost onto consumers as any tax would be taken
into account by URE, a regulatory agency which sets gas prices in
Poland, a person familiar with the matter said.
Some sector participants say they would welcome the publication
of the tax proposal even if it means paying more to the government
if it removed the current regulatory uncertainty.
Write to Marynia Kruk at marynia.kruk@dowjones.com