And Now, Some Good News in Poland
It sounded like a dream come true.
In a session entitled dedicated to the Operator’s Perspective at the Unconventional Gas & Oil Summit in Warsaw, Poland Kamlesh Parmar, Country Manager, Poland at Lane Energy recounted how in March ConocoPhillips, the company’s JV partner in Poland’s Baltic basin, had exercised a call option to take a 70% stake in the assets.
"This is exactly what we’ve been working for in the last two years, that at some point they would take over operator control. It’s what I’ve been working for, it’s very positive, and exactly what I was expecting,” recalled Mr. Parmar.
He explained what was attractive to ConocoPhillips.
“As listed company in London we’re obliged to put up reports of what we’re doing,” he said. “We achieved gas flows out of both wells, but does this prove commerciality? Not yet. It’s a new play in a new country with new rocks, so it’s going to take some time.”
According to Mr. Parmar, Lane Energy had fracked wells, got gas to surface and had drilled two horizontal wells in Europe. He said that drilling on the company’s concessions was hard work and now there were new challenges.
“We’re bringing a fairly new concept to Europe,” he explained. “Convincing people was hard work: We had to show them we were serious and this was a real idea.”
Parmar explained that before drilling Lane Energy was trying to raise its profile and raise awareness of shale gas potential, but later tried to calm things down. He joked: “Hang on, we haven’t got the gas yet.”
According to him, having more operators now in Poland was a good thing.
He recalled, “Then we had only PGNiG subsidiaries to provide us with services, and later, international service companies arrived. Since then, more companies are coming to Poland with rigs, and this gives us more choice, and more flexibility to do our work.”
What had it been like partnering with ConocoPhillips?
“We’re two very different companies in terms of size and set up,” he explained. “They have fantastic resources, abilities and a track record in terms of operating shale plays in the US. We came into this with great experience with our team and we’re nimble and we’re quick, so there’s flexibility on our side. We complement each other.
“Having this joint arrangement has enabled us to do our work more quickly. A large company making a fresh entry into a country takes a lot of resource for them, a lot of commitment and a lot of time,” he continued.
“We are the operator, they are our partner – they have rights to look at what we do and we clear everything with them. Now the role will reverse, now they will take over the operatorship. It’s a normal O&G arrangement. It happens all over the world, and is nothing new. It has worked a lot better than I expected as I feared that the our operation style and approach would differ because of the size of the companies.”
He added that the partners had found their way through the size difference.
Parmar recalled the time in Poland when acreage was up for grabs, but that now all the acreage that had any potential at all was thought to be licensed up. Now, he said, it was time for explorers in Poland to work together as an industry; the OPPPW industry group was one manifestation of that.
Of data sharing among concessionaires, he said, “We are all obliged to share data with the Ministry. If you have your acreage, you have it. The issue is how we can share data to move the play forward? This will accelerate the learning curve.”
In terms of service companies, he noted that many players were coming in to Poland.
"I can only dream of a price war,” quipped Parmar. “We’ve come a long way. We’re in an open economy. If we can generate the work, the service companies will come. When we started, they were not here and they are now.”
He mentioned Lane Energy’s efforts to re use water and have the least impact on people in the vicinity of drilling operations.
How was it possible to avoid problems with local communities in Poland? Back up from local authorities?
"Community engagement is absolutely vital,” said Mr. Parmar. “My focus is on government relations and local relations. You have to go there, sit in their office and explain what we’re doing. I do that myself. When explaining drilling or completion activity, it’s important that the Company is there and not just represented by 3rd party consultants.”
He reported that Lane Energy had had very little negative press about its operations in Poland. He suggested letting the local Voivodes take ownership of meetings with communities and organizing meetings through them had helped.