U.S. energy company ConocoPhillips is stopping its shale gas exploration in Poland. Lane Energy Poland, ConocoPhillips' subsidiary invested around $220 million in Poland since it began its exploration in 2009.
Global oil firms were initially attracted to Poland a couple of years ago and shared the idea that eastern Europe's largest economy would yield a similar boom in shale gas like the U.S. Even Poland's former Prime Minister Donald Tusk agreed. In 2011, Tusk stated that he thought the first sign of commercial shale gas would come in 2014. The hope was that with this supply, Poland could cut back on its reliance on gas imports from Russia.
A shift away from Eastern Europe
Shale gas reserves were cut in 2012 and oil prices have slumped in this past year, delivering a blow to Poland's hope for oil independence. The country has not delivered a single well, although a substantial amount of exploratory drilling has been completed.
"Unfortunately, commercial volumes of natural gas were not encountered," said Tim Wallace, Poland ConocoPhillips country manager. Although the company drilled seven wells over its three Western Baltic concessions, the results were unsatisfactory.
ConocoPhillips isn't the first company to withdraw from exploration in Poland. Chevron Corp. gave up earlier this year, following the departure of Marathon Oil, Total and Exxon Mobil over the past three years. ConocoPhillips expects a charge for its removal from Poland exploration. The company estimates approximately $90 million pre-tax and around $30 million post-tax.
With no global energy companies still in the running for Poland's shale gas supply, the field is left to Polish state-run firms, gas distributor PGNG and refiner PKN Orlen.