Exxon Sells Polish Shale Interest to State Company
Three days after Natural Gas Europe informed that “situation would be clarified in coming days,” ExxonMobil is understood to have agreed sale of two shale gas exploration concessions in Poland to the country's state-owned refiner PKN Orlen.
PKN Orlen revealed the companies had filed an application requesting approval for the assignment of two licenses in the Podlasie Basin.
The price tag has not yet been disclosed. In a statement, the Polish energy concern said it now had 10 shale gas exploration and appraisal licences, with a total area of almost 9,000 square kilometres.
The US supermajor, which had six concessions, dropped its exploration plans in June after test wells failed to produce commercial quantities of gas, dealing a blow to Poland's hopes of becoming a major producer of shale gas.
It has to date relinquished three licences and, after the completion of the deal with PKN Orlen, will still have to decide on the fate of one.
The latest licences to be acquired by PKN Orlen cover 2150 sq km near Wodynie-Lukow in central Poland.
The deal remains subject to approval from the Environment Ministry that handles exploration permits in Poland, Reuters reported, noting that it marks PKN Orlen's growing leverage in developing resources that could help Poland cut its dependence on Russian supplies.
PKN Orlen and another state-controlled group, PGNiG, stand at the forefront of Poland's shale gas drive. In today's statement PKN Orlen says it plans to spend around 5 billion zloty in the next five years on exploration, much of which will involve shale gas.
Currently, Poland, which is central Europe's largest economy, relies on Russia's Gazprom for more than half the gas it consumes.Warsaw wants commercial production of shale gas to start as soon as possible so it can limit this dependence.
Poland had high hopes for shale gas after a US study from 2011 estimated Polish reserves at 5.3 trillion cubic metres, enough to cover domestic demand for some 300 years.
However, estimated reserves were slashed to about a tenth of that in a government report published in March.
Further reading: Polish Summary Report Not On Horizon, PGNiG Launches First Horizontal Fracking Operation