Poland To Ease Tax To Attract Energy Explorers

Poland will not collect taxes on the production of shale gas until 2020, the finance minister has said.

The move is seen as designed to provide counter-encouragement to explorers, after a series of disappointments have led two energy majors to depart the scene in recent months.

"The law on the taxation of shale gas will go into effect in 2015, but we will not levy the tax until 2020 to attract companies to extract shale gas," Finance Minister Jacek Rostowski said in a speech reported by agencies Wednesday.

Poland's government is keen to promote shale gas mining, both to reduce dependence on natural gas from Russia, but also as an economic benefit, with numerous foreign investors interested.

However after the country estimates for shale reserves were downgraded, and a number of drilling projects did not live up to expectations, the foreign scene has looked less bright.

Talisman Energy withdrew, selling some of its interest to San Leon Energy, earlier this month after indicating the move for some months.

Major player Exxon Mobil and US oil firm Marathon have also withdrawn from their Polish shale gas operations, with some executives citing uncertainty about the regulatory environment as a factor.

 The finance ministry has previously said taxes and levies on gas and oil exploration would total about 40% of the sector's profits from 2015, making Poland a more attractive investment than Britain or Australia.

The US Energy Information Administration originally estimated Polish shale gas reserves at 5.3 trillion cubic metres, but this was subsequently revised downwards to about a tenth of that figure.

See also: Polish shale gas pull-outs not necessarily tragic - bank