Bloomberg News

Poland Says 22 Shale Gas Wells Under Way or Planned in 2012

March 02, 2012

Companies including Chevron Corp. (CVX), Talisman Energy Inc. (TLM) and Eni SpA (ENI) are drilling eight shale gas exploration wells in Poland, while another 14 are planned for 2012 by license holders, according to the Environment Ministry.

Chevron is drilling one well and plans another four for this year at Krasnik, Zwierzyniec, Grabowiec and Frampol in south eastern Poland, the ministry’s press office said in an e- mailed response to questions from Bloomberg News. Marathon Oil Corp. (MRO) has one well in progress and another two planned.

Polskie Gornictwo Naftowe i Gazownictwo SA (PGN), Poland’s biggest gas distributor and importer by volume, and refiner PKN Orlen SA (PKN) are planning to drill one exploratory well each, according to the ministry.

Poland has granted more than 100 licenses, and 13 wells were completed by January out of a mandatory 124. Some have been as deep as 3,600 meters (12,000 feet). The country said yesterday it may cut last year’s estimate by the U.S. Department of Energy that it holds 5.2 trillion cubic meters of gas, or enough fuel trapped in shale to meet its needs for 300 years, after data from the first wells are analyzed.

Lower Than Forecast

“Poland’s shale gas resources are likely to be substantially lower than the forecast by the U.S. Department of Energy, but remain economically viable to produce,” Jerzy Nawrocki, the director of Poland’s Geological Institute, told reporters in Warsaw today. The institute will announce its estimate of resources on March 21.

In a separate report, the institute said that hydraulic fracturing can be done without adverse environmental impact, following a study of an exploration well drilled by 3Legs Resources Plc (3LEG) in northern Poland last year.

Shale gas development, where rock formations are horizontally drilled and broken apart using water, chemicals and sand under high pressure in a process known as hydraulic fracturing, or “fracking,” has driven a surge in U.S. gas output and damped prices.

“Soil, air, water -- the study shows that all these elements of the environment are safe if exploration of shale gas is carried out in accordance with regulations,” the Warsaw- based institute said in a statement.

Experts from the institute have not detected higher concentrations of methane in the soil following hydraulic fracking. The quality of ground and surface water didn’t decrease and no ground vibrations or shaking that could endanger buildings or infrastructure, were detected during fracking, according to the report.

According to government officials, as many as 300 wells are needed to confirm the country’s shale gas potential. Treasury Minister Mikolaj Budzanowski in January urged state-controlled energy companies to boost drilling with the aim of starting commercial exploration as soon as 2014 or 2015.

To contact the reporter on this story: Marek Strzelecki in Warsaw at mstrzelecki1@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net


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