Bloomberg News

Poland to Ease Environmental Rules Slowing Shale Search

February 15, 2013

Poland’s Environment Ministry plans to ease environmental regulations that slowed exploration for shale gas and boosted costs for investors.

A number of rules will be clarified, while environment impact assessment reports will be required only for a drilling site rather than the whole acreage of a license, the ministry said today in a statement.

Rules requiring investors to seek permits any time they want to drill deeper or in a different direction than originally planned have slowed down Poland’s goal of cutting its dependence on Russian gas. The eastern European country has granted 113 exploration licenses to companies including state-controlled Polskie Gornictwo Naftowe i Gazownictwo SA and Chevron Corp. (CVX:US) to tap shale gas resources estimated at about 50 years of consumption.

“Our goal is to start shale gas production as soon as possible and that requires regulation that will be friendly for investors,” Environment Minister Marcin Korolec said today in an interview in Warsaw. “The new rules will be very attractive, probably the best one can find.”

About 25 percent fewer exploration wells were completed last year than forecast by the ministry as some projects were delayed.

Under the new rules, investors will be able to drill as deep as 5,000 meters (16,400 feet) during exploration without all the environmental permits needed under current rules, Korolec said. The permits will be required during production, he said.

Hydrocarbon Taxes

The ministry said that a new tax regime for the industry will be included in a separate draft that is being prepared by the Finance Ministry. As announced last year it will cap levies on hydrocarbon production at a total of 40 percent of profit.

The draft will call for setting up a state-run company to oversee oil and gas production and become a shareholder in ventures responsible for output. It will also create a hydrocarbon fund to benefit from proceeds from exploration, according to the guidelines. It will need to be approved by the government and the parliament.

Under the proposed licensing regime all permits will be granted in tenders, while holders of existing exploration concessions will have the option to invite the state fund, known as NOKE, to become a shareholder. The fund’s share in costs of the venture will be capped at 5 percent, and NOKE won’t be taking on the role of operator, the ministry said.

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

To contact the editor responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net


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