Czech it Out
Poland gets drilling help from neighboring enterprise
In some cases, help is closer than one might suspect when it comes to developing Poland’s emerging shale gas sector.
Czech enterprise MND Drilling & Services, which operates mainly in the Czech and Slovak markets, has been contracted in Poland due to the fact that the company owned a Bentec 350 Rotary Rig, which was capable of deeper wells.
In an exclusive interview, René Kachyňa – Managing Director of MND D&S spoke to Natural Gas for Europe at Shale Gas Results in Europe 2011 in Warsaw, Poland.
“At the moment, the demand for deeper wells in the Czech Republic is not so big,” he explained. “We were quite naturally looking for alternative markets or job opportunities abroad and we saw an open window and potential in the Polish shale gas market that was just about to start at that time and we wanted to see what needed to be done in order to get a crew as well as the rig here to Poland.”
For Czech company MND, Polish shale plays seemed like a big opportunity in a market right next door. Mr. Kachyňa said MND had already worked for one of the key players in Poland, before it commenced work with its present client.
“We are also at the moment working for another company here working in Poland and quite naturally, I think it’s because the demand for the drilling contractors is bigger now than what the market can offer, that we got a chance really to offer our services here as well.
“Also,” he emphasized, “we were the first companies that successfully passed the legalization process when it comes to mining authorities or any other restrictions – we’re able and capable, not only to bring our rotary rig, but at the same time our own crew.”
According to Kachyňa, MND possessed a Euro Rig which was made in Germany, making it much easier to legalize it, and to get recognized by local authorities in Poland.
He said that qualification and getting in early into the Polish shale market had created opportunity for MND. Cultural affinity had also been a help.
“Quite naturally we know that the other drilling contractors are coming and competition is needed, and we think what also helps us is that Czech and Polish, being both Slavic languages, are close to each other and we can understand each other fairly well. I think that’s also a big part of our success,” he said.
Mr. Kachyňa admitted that it could be a bit of a quandary for MND to determine what rates to charge shale gas prospectors in Poland, given that it was very early in the game.
“It’s a tough decision in the beginning, because we do believe in the potential but it hasn’t really been proven yet – everyone is in the phase of evaluating their projects, so nobody’s really willing to sign a contract for the next couple of years, or a year in advance.”
He continued, “So the quotation for rates is the challenging and tough part and it will get even worse I guess as more operators come, but I think we can be very competitive due to the fact that the Czech Republic and Poland are so close to each other, I would say that even the rates can be very close or similar. It’s really up to the rates that we can bring and the work that we can provide.”
Not only did MND work as a drilling contractor, Kachyňa said, but also performed turnkey projects in Poland.
“We realized that we needed to offer to our customers almost anything you can think of, starting from the field: well site building, water supplies and all the way to catering and housekeeping. I don’t think some of the big key players here will have time nor the will to deal with these minor things and they will be looking for contractors that are capable of doing this,” he explained.
“Quite naturally Polish companies, being local, have the contacts and they have the possibilities and opportunities to provide such services and we have to become competitive, so we’ve just located a strong partner in Poland. Together we think we are quite capable of completing such turnkey projects.”
Regarding the state of the shale gas business in Poland, he said he believed there was still a great lack of information for the key operators as well as for the new drillers coming to the market.
“I think that this should change,” he said. “There should be more communication from the state authorities and among all the operators and drilling contractors as well. It would save them a lot of hassles. Once you do this, you can just share the information with others and won’t lose anything through it - you can only gain. I think this is another of the key factors for success.”
Mr. Kachyňa said he had observed the lack of a drilling culture in Poland a la Oklahoma or Texas.
“On the one hand, I find it very annoying and it holds progress back, but at the same time I see the reasons. This is after all a very small continent with a high population density and if you do not have certain restrictions and rules to obey it may turn out to be something nasty, and I don’t think anyone wants that. So I see sense in the regulations and reasonable rules that have to be obeyed, but some of them are taken ad absurdum and it’s just too much. There should be at least second thoughts on some of them and thinking about whether we need all of these restrictions, all the regulations. And if we do need these, let’s see how we can help upcoming drillers and operators to follow them and fulfill them.
“I think there should be a bit more opening from the EC as well as from the Polish government,” he added. “Something should be done to help the new players, the new companies coming on to the market.”
Kachyňa offered a bit of advice for those entering the Polish shale gas market.
“Foreign operators coming onto the market must realize that it’s a different world here. I’m not talking about people, but about the view. For some of the key operators used to working in the US or other parts of the world it may be difficult for them to realize that they really have to follow the laws and rules no matter how ridiculous they may seem.
He said he was optimistic about the future of unconventional gas in Europe.
“Well, we do believe in unconventional resources and believe in the potential of shale gas. We think that it will increase and will be fairly big within a couple of years. Main operators from other countries are already coming and will be coming to Poland and will be drilling here and we want to be part of that.”