ExxonMobil Moves Forward on Pullout from Poland with Orlen Deal
PKN Orlen says it has reached an agreement with ExxonMobil to purchase two of the remaining three exploration licenses still held by the American company in Poland.
Three days after Natural Gas Europe informed that “situation would be clarified in coming days,” PKN Orlen revealed the companies had filed an application requesting approval for the assignment of two licenses in the Podlasie Basin.
ExxonMobil is to sell Wolomin license, located East of Warsaw in central Mazowsze province and Wodynie -Lukow license, further South East of Warsaw, located in Mazowsze and partly in Lubelskie.
If the assignment is accepted by the Environment Ministry, the Exxon’s pullout from Poland will be almost complete.
In 2008/2009 ExxonMobil acquired six exploration concessions in Poland, four in the Podlasie Basin and two in Lubelskie.
Last February the firm announced, that the first two wells, drilled in the second half of 2011, were not commercially viable. The decision to leave Poland was disclosed in June.
The American company then returned three out of its six concessions to the Environment Ministry in September.
While the mightiest international player exploring for shale gas in Poland retreats from the country, the Central Europe’s largest petroleum firm takes over.
“We expect a relevant decision will be issued by the Department of Geology and Geological Licences in the next few weeks” – says Wieslaw Prugar, the President of the Management Board of Orlen Upstream, the upstream branch of the oil firm PKN Orlen.
Upon government clearance, the number of licenses held by Orlen Upstream will be raised to 10. Total acreage will increase by 2.150 sq kms to reach almost 9 thousand sq kms.
Wieslaw Prugar says that the company was encouraged to broaden the scope of exploration by analyses of the archived geological data and newly collected samples:
“We have chosen the Wodynie-Lukow and Wolomin licences because of positive results obtained from the vertical exploration well drilled in the village of Gozdzik, and because the entire region is highly prospective”.
Orlen Upstream has already drilled five exploration wells, including one horizontal, which is to be fracked soon. The company is planning to start drilling up to three further vertical wells by the end of this year.
According to the press release, Orlen Upstream intends to drill at least 50 further wells before 2017.
The mother company’s representatives have said earlier that PKN Orlen assumes that 7 wells will be generating profits before the end of the next five-years planning period.
Last week Orlen announced plans to spend 22.5 billion zlotys (5.5 billion euros or 7.1 billion dollars) on investments in 2013-2017.
Upstream sector, along with energy generation, is considered a crucial part of the strategy, with 5.1 billion zlotys directed to the upstream segment.
The value of the possible deal with ExxonMobil has not been disclosed yet.